Commerce Ministry favours relaxing gold import curbs

The Commerece Ministry today said it is in favour of relaxing restrictions on gold import duty in order to boost the gems and jewellery industry.

It has "at least in the last one year maintained that in order that gems and jewellery sector does not get adversely affected, there should be some easing of gold import (norms)", Commerce and Industry Minister Nirmala Sitharaman told reporters here.

The gems and jewellery industry has been complaining that it is difficult to compete in the global market because of 10 per cent duty on gold imports.

The Finance Ministry has been of the view that gold imports are on the rise and continue to pose threat to containing the current account deficit (CAD). However, she said that "we understand the constraints in the context of CAD that the Finance ministry would be facing because gold seems to be an unending import for India and therefore a cause of worry. So we have to balance it".

The CAD in the July-September quarter of current fiscal rose to $8.2 billion or 1.6 per cent of the GDP, from 1.2 per cent or $6.1 billion in the April-June quarter. Gold is the second-largest import item for India after petroleum. Higher gold import bill adversely affects the country's current account deficit, which takes hold when value of imports is more than that of exports.

During April-November this fiscal, gold imports have declined to $22.65 billion from $24.49 billion in the same period last year. In volume terms, the imports was 689 tonnes during April-November 2015 as against 628 tonnes in the same period last year.