Gold import level not a cause for concern: Commerce Secretary

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Gold imports in December and January have been low and not caused the Government any worry, Commerce Secretary Rajeev Kher has said. There are no plans to re-impose the 80:20 scheme — mandating importers of gold to export a fifth of their imports — that was withdrawn in November.
Asked if the scheme would make a return, Kher said, “Why should it?”
“Gold imports in December were 39 tons and in January it is 7 tons so far. There has been no surge at all,” he pointed out. In November 2014, gold imports had increased to 152 tons, but Kher said this was more on account of the festive season than a change in policy.
The 80:20 scheme was introduced by the UPA Government in July 2013 to curb gold imports and keep the widening current account deficit in check.
The scheme was withdrawn in November 2014.
The Commerce Secretary held a meeting with gems and jewellery exporters on Wednesday to discuss the policy thrust needed to help the sector.
Many issues discussed
“We discussed a range of issues, including disciplines around import and export, financing of raw materials, mining of gold and … fashion jewellery,” Kher said. He added that the idea was to have the right policy environment for the entire gamut of gems and jewellery, not just diamonds and gold.
“With the 80:20 scheme gone, we expect the availability of gold in the market to improve,” said Pankaj Parekh, Vice-Chairman, Gems & Jewellery Export Promotion Council (GJEPC). It will also reduce smuggling, he said.
Flaw in duty drawback
The GJEPC has also asked the Centre to rationalise the duty drawback scheme, which, at present, refunds lower input duties on domestic gold used by exporters than what they actually pay.
“We are taking up the issue of rationalising the duty drawback scheme in the budget-making exercise,” Kher said.
Source: Hindu business line
Source: Bullion Bulletin

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