Commerce minister for easing of gold import curbs
11 August 2014
Commerce and industry minister Nirmala Sitharaman has pitched for relaxing import curbs on gold amidst rising smuggling of the precious metal into the country and high import duties mauling the jewellery industry.
"As commerce minister, I would want the gold restrictions to go away because gems and jewellery industry have been worried that a sector, which is potentially so powerful is suffering because of the gold import policy," she said.
The gems and jewellery industry contributes significantly to the country's total exports, she added.
Gems and jewellery exports accounts for about 15 per cent of the country's total outbound shipments. In 2013-14, the exports were to the tune of $39.5 billion while India's total exports stood at about $312 billion.
She said that restrictions are not only hurting the industry but has also led to spurt in smuggling of the precious metal.
"Gold policy which was brought in for some other purpose because you want to contain growing CAD (current account deficit) but that hurts industry very badly. We have been telling that to the finance minister," she added.
She said that restrictions may have had impact on CAD but "it has also brought back the horrible days of smuggling of gold."
The number of cases of gold smuggling had gone up to 2,441in 2013-14 compared to 869 in 2012-13 and 500 cases 2011-12.
The minister expressed hope that once the CAD enters into comfort zone, the finance minister may reconsider relaxing the import norms.
CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of $88 billion or 4.7 per cent of GDP in 2012-13, mainly due to rising imports of gold and petroleum products.
In order to check the rising CAD, the government raised import duty on the yellow metal to 10 per cent, while RBI imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal.
Gold imports declined 72 per cent to $2.19 billion in May.