Demand for easing curbs on gold imports
Demand for easing curbs on gold importsNew Delhi, Dec 23 (KNN) In order to ease restrictions on import of gold to help jewellery exporters, the Commerce Ministry is reported to have asked its Finance counterparts to look into the matter and issue necessary instructions.
Reports suggests that Commerce Secretary S R Rao is believed to have written a letter to Economic Affairs Secretary, Arvind Mayaram, asking him to "look into the matter (gold imports by exporters) and issue necessary instructions to the RBI for removal of the anomaly.”
The (Commerce) Department is repeatedly receiving representations from stakeholders in the matter and our exports are suffering," he argued.
As India is a net importer of gold, RBI had imposed curbs on imports in August to reduce the Current Account Deficit.
The RBI circular issued on August 14 had said that all entities should ensure that at least one-fifth, or 20 per cent, of every lot of import of gold is exclusively made available for the purpose of exports and the balance for domestic use.
Rao also said that "Foreign Trade Policy (FTP) does not prohibit exporting first and then importing (for replenishment), the prohibition imputed by the Department of revenue based on the RBI circular does not appear to be in order".
The Reserve Bank of India on Wednesday said it is not the right time to take back measures it adopted to control rising current account deficit, but favoured removing curbs on gold imports.
"At this point, it will be premature to withdraw these restrictions for a variety of reasons," RBI governor Raghuram Rajan was quoted as saying in a media report.
In the first half of this year, CAD stood at USD 26.9 billion (3.1 per cent of GDP), down from USD 37.9 billion (4.5 per cent of GDP) in the first six months of 2012-13.
The government and the RBI expect to contain CAD at USD 56 billion in 2013-14. In the previous fiscal, it had touched a record high of 4.8 per cent. (KNN/SD)