The Ministry of Commerce and Industry today made a case for easing curbs on gold imports as over—regulation is encouraging smuggling of the yellow metal.
“I have been of the consistent view that we have to have a balance. Over—regulation leads to another problem...and that is smuggling. Therefore, some easing is essential,” Commerce and Industry Minister Anand Sharma told reporters here.
Sharma said he has taken up the issue with the Finance Ministry and the Reserve Bank of India.
“The Commerce Secretary and the Director General of Foreign Trade will take it forward. We have to ensure adequate availability of gold for gems and jewellery industry. This is very important sector for exports,” Sharma added.
The minister said public sector units such as MMTC are ensuring adequate availability of gold to the industry.
To contain rising gold imports, the government had increased customs duty on the yellow metal three times in 2013. The levy currently stands at 10 per cent.
The Reserve Bank also linked imports of the metal to exports amid a widening current account deficit (CAD) and depreciation of the rupee.
Gold imports, which touched a high of 162 tonnes in May, fell to 19.3 tonnes in November in the wake of the curbs by the government and the RBI.
A spurt in gold imports had pushed the CAD to a record high of USD 88.2 billion, or 4.8 per cent of GDP, in the previous financial year.
Gems and jewellery exporters, who contribute to about 15 per cent of the country’s total shipments, raised concerns over the import restrictions and are demanding easing of the norms. Gems and jewellery exports in January contracted 9.39 per cent.
According to the government, gold smuggling shot up last year on account of price fluctuations, import restrictions and high customs duty. In 2013, the value of gold bars and biscuits seized amounted to Rs 271.15 crore.