Jewellers and the bullion trade alike are against any new restrictions on gold imports as they feel this would prove detrimental to industry interests and further fuel smuggling of gold into India.
There are expectations that authorities may impose restrictions on gold import following data which showed that this had more than quadrupled in October 2014 to 106.3 tonnes (26 tonnes in October 2013).
The All India Gems & Jewellery Trade Federation (GJF), representing more than 6,00,000 players, feels any further curbs could spell doom for the gems and jewellery sector. "Since the base of gold imports in September-October 2013 was low, the increase may seem very high but this comparison cannot be used to impose further restrictions," Harish Soni, Chairman, GJF said, adding that higher demand was a normal trend, "stimulated by advance buying prior to festival time and anticipation of additional curbs on gold imports as indicated by the government."
Prithviraj Kothari, Executive Director, India Bullion & Jewellers Association (IBJA) told The Hindu , "there must be other options. Gold has become more a currency than a commodity and increasing the duty will only encourage smuggling and new restrictions will further impact availability. Gold deposit schemes should be encouraged."
Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC) said his organization was neutral "as long as exporters are not disturbed. The government is no doubt keen to curb domestic consumption."
GJF said that importers had not yet distributed gold imported in September-October 2014 to jewellers as gold hoarders were "holding on to their stock in anticipation of higher profits resulting from further curbs and restrictions to be announced by the government."
While proposing to curb sale of gold coins and bars immediately by its members to restrict demand, GJF said these account for about 300 tonnes. GJF also proposed unlocking idle gold to the tune of 1,000-1,500 tonnes in three years through its proposed Rashtriya Swarn Nivesh, a gold deposit scheme.
