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‘No question of gold import ban... but please reduce your appetite’

Ruling out a complete ban on gold imports, Finance Minister P Chidambaram on Tuesday appealed to the people to moderate their demand for the
precious metal which is costing the nation 50 billion in foreign exchange. 'We cannot completely ban import of gold. There is a long-time attachment to gold in this country. I am requesting... can we for sometime moderate the demand for gold?' he said.

'Can we reduce our appetite for gold? If you are buying, say 20 gm, can you buy 10 gm?' he said. He attributed the high current account deficit (CAD) to mainly gold imports. ‘We have a current account deficit. $50 billion is the cost of gold. I am appealing to the people of India to moderate demand for gold,' the minister said.

Gold imports in June are estimated to have fallen to around 31 tonnes, down from 162 tonnes in May and 141 tonnes in April. To curb demand, the Government hiked the import duty on gold thrice in a single year and recently raised it by 2 percentage points to 8 per cent. Besides, the Reserve Bank of India (RBI), too, has put restrictions on banks on importing gold.

India is the world's largest importer of gold and the yellow metal is mainly utilised to meet demand of the jewellery industry. The imports stood at around 830 tonnes in fiscal 2012-13.
In value terms, gold and silver imports are estimated to have declined substantially to $2.45 billion in June, from $8.39 billion in May.

From April to June, inward shipments stood at to $18.33 billion in value terms. High imports strain the current account deficit, which hit a record high of 4.8 per cent in the 2012-13.
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