New Delhi, June 1 (KNN) The government is deliberating a proposal to import gold from Russia on a bonded basis to help gems and jewellery exporters, Commerce and Industry Minister Suresh Prabhu has said.

Since import of gold affects current account deficit, Prabhu has proposed to make import of gold on bonded basis that will be used only for value addition and not be considered as imports.

Provided the fact that they agree to ship out the entire consignment after value addition, Prabhu said he will discuss the proposal with highest authorities.

Prabhu said “under the 'bonded basis' imports, the duty free consignment will not be allowed for domestic use and the entire gold will have to be exported after value addition.

Explaining the details of proposal and its pros, he said the scheme is expected to help save foreign exchange and cut the country's import bill in US dollar terms.

The idea was floated by Prabhu during his recent visit to St Petersburg International Economic Forum (SPIEF) 2018.

Further he added that the Russia is a reservoir of gold, it has huge gold resources and India has a huge potential of jewellery exports. It is a labor intensive sector.

“Import of gold affects current account deficit.Therefore, I have proposed to them that can we import gold from Russia on a bonded basis. That will come here but will not be treated as imports and that will be used only for value addition and then export," he said.

India's gold imports declined by about 13.5 per cent to USD 27.4 billion in 2016-17.It is one of the largest gold importers in the world, led by demand from the jewellery industry.

The idea assumes significance as the gems and jewellery exporters have raised issues over high import duty on gold. Currently there is a 10 per cent customs duty on the yellow metal.

India, being the world’s largest cutting and polishing centre, Prabhu proposed to Russia to increase exports of rough diamond for cutting and polishing from India.

To further strengthen economic ties with Russia, the minister has proposed to develop agriculture and creation to corridor to facilitate smooth movement of consignments.

"This was a very important and productive visit," he said, adding that in September the ministry is planning to invite 100 Russian industrialists to make goods in India and promote business between the two sides.

According to the government data, the bilateral trade between the countries increased to USD 7.5 billion in 2016-17 from USD 6.2 billion in the previous fiscal. But the trade is in the favor of Russia.