The government will review in March some of the measures taken to curb gold imports to control the current account deficit (CAD), finance minister P Chidambaram said on Monday.
“I am confident that by the end of this year we will be able to revisit some of the restrictions on gold import but we will do so only when we are absolutely sure that we have a firm grip on the current account deficit," Chidambaram said at an event in New Delhi.
He, however, didn't give any time-frame by when the government could roll back some of the measures, including the hike in the import duty on the precious metal to 10% in August last year.
Commerce minister Anand Sharma said that he was in favour of a review of the gold import regulations that the Indian gems and jewellery industry has been seeking. “We have by and large gone with the revenue department and the RBI on the matter. We are equally keen to ensure that we remain strong and competitive when it comes to the gems and jewellery sector,” Sharma told reporters on the sidelines of the CII Partnership Summit 2014 in Bangalore.
“I'm for a review. We will revisit this matter and see how to have a balance,” Sharma said adding that he will take up the issue with the finance minister.
Earlier this month, UPA chairperson Sonia Gandhi had written a letter to commerce minister Anand Sharma to look into demands of gems and jewellery exporters for a reduction in the customs duty on gold and relaxation of the 80:20 rule set by the RBI.
The central bank had first mandated in July that at least one-fifth of the imported gold must be kept aside for re-exports and no fresh purchases from overseas can be made by a trader until the 20% of the reserved gold is shipped out after value addition. The government hiked the import duty on gold three times from 4% since the beginning of the last year. Authorities intensified crackdown on gold imports, especially since June, after imports in the first two months of this fiscal exceeded a record 300 tonne, worsening fears of a runaway CAD.
The All India Gems and Jewellery Trade Federation (AIGJF) had written to Gandhi, Chidambaram, Sharma and Prime Minister Manmohan Singh, seeking a massive cut in the import duty on gold to 2% from 10% and