Will look into curbs on gold imports: Chidambaram

Tags: News
Stressing that goal is to ensure safe financing of Current Account Deficit (CAD), the government today said it will look into relaxing restrictions on gold imports only after weighing all pros and cons.

"There are pros and cons to relaxing restrictions. We will weigh them carefully and take a decision....We have to keep in mind the goal is to contain the CAD at a level where it can be safely and fully financed.

"Keeping that goal in mind, if anything can be done, we will certainly look into it. The operative word is 'we will look into it'," Finance Minister P Chidambaram said during his interaction with reporters post presentation of interim budget.

The Minister, however said he cannot make any announcements because Parliament is in session.

High gold import was one of the major reasons for India's record CAD of $ 88 billion in the last fiscal, which in turn was putting pressure on value of rupee.

In the first two months of the current fiscal, the imports had crossed 300 tonnes.

To restrict the gold import, the government raised the customs duty thrice to 10 per cent in 2013.

The Reserve Bank too imposed several restrictions, including linking the gold import to exports.

Chidambaram said the curbs on gold import were "absolutely necessary" for India's economic health and the restrictions have helped.

He said India cannot afford to import gold worth $ 50-60 billion a year as it leads to foreign exchange outgo.

The steps by government and RBI led to huge drop in gold importd that slowed to about 19 tonnes in November.

This financial year, the CAD has been contained at $ 45 billion. The exchange rate too has stablilsed.

The Finance Minister also indicated the CAD may further fall below $ 45 billion.

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