Jewellery makers seek Sonia’s intervention to relax gold import norms
23 Jan 2014
Jewellery makers have made a representation to United Progressive Alliance (UPA) chairperson Sonia Gandhi seeking relaxation of gold import norms even as finance minister P Chidambaram has ruled out any such relaxation.
Gold stocks, meanwhile, gained in an otherwise dull market after Sonia Gandhi forwarded the letter to the commerce and industry ministry, urging it to look into the industry's demand for appropriate action.
Gold jewellery makers are seeking relaxation in gold import norms, including the 80:20 rule, which requires importers to supply at least 20 per cent of import quantity of gold to jewellery exports.
Also, jewellers have also to submit proof of export realisation of the first consignment before seeking delivery of third trench of gold supply from importers.
Finance minister P Chidambaram, however, talking to media in Davos ruled out any such relaxation saying that, ''Until we have a firm grip on the current account deficit I do not contemplate any roll back in any measure. He however also clarified that he has not seen letter from Sonia Gandhi.
''We sent several representations to the Ministry of Commerce and Industry seeking relaxation in gold import norms including 80:20 rules since the current account deficit (CAD), for which these restrictions had been imposed, has come under control. These restrictions have squeezed supply of gold for jewellers. Therefore, the time is ripe to relax these norms,'' said Vipul Shah, chairman of Gems and Jewellery Export Promotion Council (GJEPC), the apex jewellery export promotion body.
''Through import restrictions, India has entered into gold control era of 1960s once again. The industry suffocated due to non-availability of gold, lost a large chunk of skilled artisans to other industries. These are unrecoverable loss, the industry has suffered. The only way out is to liberalise gold imports immediately so that jewellers would commence capacity utilization of their units fully,'' said Haresh Soni, chairman of All Indian Gems and Jewellery Trade Federation (GJF).
While duty cut may not bring any major relief to jewellers as restrictions have not lowered the demand for gold Indians, rampant smuggling of the metal is creating an official supply deficit.