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The recent curbs on gold imports may lead to a foreign exchange saving of $10-12 billion this fiscal, a top policymaker has said.
This is expected to bring down the overall gold import bill from last year’s level of $54 billion to about $43 billion this fiscal, C. Rangarajan, Chairman to the Prime Minister’s Economic Advisory Council said.
The Centre’s strategy for curtailing current account deficit (CAD) to about $70 billion this fiscal mainly revolves around measures to curb yellow metal imports.
The entire effort is to take the gold import bill to the same level as seen three years ago – $43 billion, he noted.
The Centre had made a series of import duty hikes from a level of two per cent in 2012 to 10 per cent now.
It had also closed the import window for banks that were importing gold coins and bars on easy credit terms and selling it in India.
He highlighted that three of the four channels of capital flows — foreign direct investment (FDI), foreign institutional investors (FII), external commercial borrowing (ECB) and Non Resident Indian (NRI) deposits — are doing reasonably well in the first quarter.
The flows through FDI, ECB and NRI deposits are at a level higher than last year. Only in the case of FIIs, the flows have been negative during the first quarter.
Rangarajan also indicated that some more action may be taken in the coming days to increase the capital flows.
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