While gold jewellery exports have been moving up, the imports of gold bars for export purposes have significantly declined since the beginning of the financial year. Except for gold bars, the imports of other raw materials for jewellery manufacturing have been growing steadily.

During April-July 2010, the export of gold jewellery has grown by 22.93 per cent to Rs 13,320 crore from Rs 10,836 crore during the same period last fiscal. In dollar terms, the growth has been around 31.15 per cent.

However, during the same period the import of gold bars has declined by 34.70 per cent to Rs 6,605 crore against Rs 10,115 crore in the same period last year. In dollar terms, the dip has been 30.73 per cent.

Till March 2010, import of gold bars too has been growing. In March the import grew by 78 per cent in rupee terms and 100 per cent in dollar terms. Last financial year, the imports were up by 55.45 per cent.

However, in April the imports fell by 42 per cent and in June it was down by 52 per cent, while the jewellery exports grew by 7.08 per cent and 14.84 per cent respectively.

Asked about this export-import trend, Gem and Jewellery Export Promotion Council executive director Sabyasachi Ray found one of the probable reasons to be the recently introduced duty drawback scheme, under which smaller exporters can procure gold from the domestic market, other than the designated agencies for import, and avail the duty benefits of gold imports.

“We have not studied the trend. Duty drawback scheme could be a reason,” he said.

According to Raphi Ant­ony, managing partner of Peeyar Exporters, the com­pany has been procuring gold from the domestic market whenever the rates fell as this made metal cheaper after availing the duty-drawback.

However, Duty Draw­back Directorate does not find the scheme as a reason behind the decline. “As it is a recently introduced scheme, we have not estimated the number of beneficiaries. But it mainly pertains to small exporters and it cannot account for such a decline in imports,” said an official of the Duty Drawback Directorate.

Indian gem and jewellery sector imports raw materials like rough diamonds, gold bars and other rough stones, processes or makes jewellery out of them before re-exporting them. Gold production is negligible in India and the largest consumer of gold imports the yellow metal for domestic consumption as well as exports.