It helps hugely that the trade is dominated by Gujaratis who have never hidden their unequivocal support for Narendra Modi.

Bullion traders and jewellers are ecstatic about Narendra Modi gearing up to take over as the Prime Minister of India.

As election results starting trickling in on Friday last, the afternoon heat seemed to matter little to those milling around south Mumbai’s busy Zaveri Bazaar, an area dominated by diamond traders and jewellers who distributed sweets and burst firecrackers to celebrate the BJP victory.

It helps hugely that the trade is dominated by Gujaratis who have never hidden their unequivocal support for Narendra Modi. “He understands the problems we have been facing over the last twelve months,” Haresh Soni, Chairman, All India Gem & Jewellery Traders’ Federation, told this correspondent. “We are sure he will solve our issues.”

India imports almost all its requirement of gold and as its second highest consumer in the world, has a huge appetite. But in a move to combat the high current account deficit (CAD), the government last year raised import duty on gold to 10 per cent and introduced the 80:20 scheme, which required gold importers to export a fifth of the quantum of imported gold. This choked supply leading to a flourishing parallel trade with huge premiums.

“The restrictions were a response to the situation and we accepted them as temporary,” Nilesh Gupta, Chairman, Administrative Committee, India Bullion & Jewellers Assocation (IBJA), said. “But the CAD moderated and the measures should have been rolled back as they were hurting the industry and continue to do so.”

The industry feels let down by the outgoing government but feels Mr. Modi will correct the earlier wrongs. “Mr. Modi has a clear thought process and encourages positive solutions to issues,” Parag Patel, a diamond trader in the heart of Zaveri Bazar told The Hindu.

“In our interactions, Mr. Modi assured us of suitable solutions,” Mr. Soni said. “I expect import duty reduction to be announced in the Union Budget but hope the 80:20 scheme is scrapped earlier.”

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