Jewellers will stop sale of bullion and coins to consumers and corporate bodies with an aim to support government's efforts to bring down the current account deficit, the All India Gems and Jewellery Trade Federation (GJF) said today. "The jewellery community is one in supporting the country in times of crisis. We are happy to help with this voluntary action. This is likely to continue for six months or till the CAD crisis is reduced. However, the government must make fundamental changes to increase manufacturing and that will lead to value added exports," federation's Chairman Haresh Soni said in a release issued here.
The federation has conducted over one dozen meetings across the country with all the local jewellers associations and members in the last one week to explain the precarious CAD situation, he said. "We have requested entire trade across the country to stop selling and taking orders for gold bullion and coins," he added. Small and large jewellers, manufacturers, major jewellery retail chains have committed to the GJF that they will stop sales and stop taking orders of coins and bullion gold bars to consumers and corporates.
Jewellery sales and value-added employment generating gems and jewellery activity will remain unaffected. GJF represents over 6,00,000 players comprising manufacturers, wholesalers, retailers, distributors, laboratories, gemologists, designers and allied services. Current account deficit, which touched 4.8 per cent of GDP last fiscal, is one of the reasons behind the weakening of rupee that has fallen to all-time lows of 60 against dollar. CAD, which is the difference between the outflow and inflow of foreign currency, touched a record high of 6.7 per cent during October-December quarter.
The central bank had said the trade deficit has widened during April-May due to surge in festival related or seasonal gold imports. To curb demand, the government hiked the import duty on gold three times in a year and raised it by 2 per cent to 8 per cent. Besides, RBI too has put restrictions on banks on importing gold.