The scrapping of 20:80 rule for gold imports by the Reserve Bank is a surprise move and a welcome step, said India Bullion and Jewellers Association President (Emeritus) Suresh Hundia.
Gold imports had risen significantly in the last few months, and there were expectations of fresh curbs to combat it.
“It is a very welcome step and has surprised us all,’’ Suresh Hundia, president – Emeritus, India Bullion and Jewellers Assocation (IBJA) said.
Gold imports had jumped 280 per cent to $4.17 billion in October largely on expectations of fresh curbs. The 20:80 scheme was introduced in August, 2013, along with a higher import duty of 10 per cent in a move to restrict gold imports and tackle the high current account deficit (CAD) of which high gold import was a significant constituent.
Somasundaram PR, Managing Director, India, World Gold Council, said:“It reflects previous statements from the RBI and the government that gold curbs are meant to be short-term.
“The timing of this development though surprising, will definitely boost confidence in general, and in the jewellery industry, in particular.”
Gem & Jewellery Export Promotion Council (GJEPC) Vice Chairman Pankaj Parikh said, “the move will put an end to the ‘monopoly’ situation, which is prevailing and also the practice of ‘dummy’ exports due to linking of imports to exports will stop.”
While reiterating that the import duty should come down from 10 per cent to 3-3.5 per cent levels to make it unviable for smugglers, Mr. Parikh expected the government to introduce a quota system for traders.
