Commerce Ministry for removal of gold import curbs

The Commerce Ministry today pitched for removal of restrictions on gold imports as the curbs encourage smuggling of the metal.

"Artificial scarcity leads to problems which can lead to flows of unauthorised commodities like smuggling and therefore I would vote for opposition where we take one decision in whatever best interest we perceive and that is on.

"I think, if the government has to revise the gold import policy, it should go for once and for all," Commerce Secretary Rajeev Kher told a news channel.

In order to check rising Current Account Deficit (CAD), the government raised import duties and the RBI imposed curbs on import of the metal and also laid down various pre-conditions for inward shipments of the precious metal.

Kher also said that the ministry has "never" supported a "very" restrictive regime.

"But in the context of the growing CAD, it was important that imports of gold had to be restricted and it had shown a very positive results. Nonetheless, it does not seem to be sustainable in the long run. Therefore. There will have to be a revision over time," he said.

"How soon that (decision) will be taken, that is something the Finance Ministry will have to take a call," Kher said.

He also said that there is a need to simply the 80:20 rule of the government and make easier for exporters to source gold for exports.

The government under the 80:20 scheme had in August 14, 2013, allowed nominated agencies to import gold on the condition that 20 per cent of the inward shipment will be exported. The permission to import the next lot would be given on fulfillment of export obligation.

Gems and jewellery exporters, which account for about 15 per cent of the country's total shipments, raised concerns over the restrictions on gold imports and demanded easing of norms in this regard.

Gems and jewellery exports dipped 4.18 per cent to $ 3.59 billion in February. During the 11-month period of the current fiscal, shipments declined by 7.15 per cent to $ 35.73 billion.

Gold and silver imports declined 71.4 per cent to $ 1.63 billion in February.

The enforcement agencies during the first nine months of 2013-14 have seized 1,074.41 kg of gold as against 326.23 kg during the entire 2012-13 fiscal.

According to reports, sleuths of revenue department have seized gold worth about Rs 245 crore being pushed illegally through the country's borders in the past one year.

As many as 700 cases of gold smuggling so far have been reported across the country during 2013-14.

Further on the rupee, he said it is floating at 60 against the US dollar and this value is "fairly good".

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