India suspends gold jewellery imports from Thailand

India has suspended all gold jewellery imports from Thailand as part of a move to impose physical curbs on a high-value commodity whose imports have contributed significantly to the country's ballooning trade deficit.

A commerce ministry statement issued today merely alluded to doubts over the origin of gold jewellery imported from Thailand.

''In view of the increasing import of gold jewellery from Thailand, the department of commerce has asked the department of revenue to issue notification suspending the import of gold jewellery from Thailand under the provisions of "Early Harvest Scheme" till the certificates of origin issued by Thailand are verified to our satisfaction,'' an official release said today.

Jewellery importers in India are tapping a low-tariff regime to buy from Thailand where gold jewellery attracts a concessional tax of only 1 per cent under a bilateral agreement, while such imports from other countries attract 10 per cent duty.

The Early Harvest Scheme, signed in 2004 and covering 82 items, provides for a host of remedial measures, including anti-dumping duties, safeguard duties and even suspension of imports in extreme cases if there is a serious injury to domestic industry or in case of rampant misuse of the treaty terms.

The suspension will remain "till the certificates of origin issued by Thailand are verified to our satisfaction," the statement said.

While the price of gold in both India and Thailand are on a par, trade sources say "most of the jewellery coming from Thailand is of Chinese or Malaysian origin."

However, for invoking remedial measures, the Indian authorities would have to establish a case of dumping or violation of rules of origin.