Seeking to push exports, the Commerce Ministry has asked its Finance counterpart to ease restrictions on import of gold, imposed by the RBI.
In a letter to Economic Affairs Secretary, Arvind Mayaram, Commerce Secretary S.R. Rao has asked him to “look into the matter (gold imports by exporters) and issue necessary instructions to the RBI for removal of the anomaly.
”... This (Commerce) department is repeatedly receiving representations from stakeholders in the matter and our exports are suffering,” Rao said in the letter.
To check rising Current Account Deficit (CAD), the RBI had in August imposed curbs on import of gold and also laid down various pre-conditions for inward shipment of the precious metal.
The RBI circular issued on August 14 had said that all entities should ensure that at least one-fifth, or 20 per cent, of every lot of import of gold is exclusively made available for the purpose of exports and the balance for domestic use.
Rao also pointed out that as the “Foreign Trade Policy (FTP) does not prohibit exporting first and then importing (for replenishment), the prohibition imputed by the Department of revenue based on the RBI circular does not appear to be in order“.
Gems and jewellery sector, which is a major consumer of imported gold, account for about 15 per cent of India’a total exports.
In the April-October period, gems and jewellery exports stood at $24 billion, accounting for 14 per cent of total outward shipments.