New Delhi, July 23 () : Gold imports became even more difficult as the Reserve Bank of India wanted 20% of the quantity that is imported to be exported by the agencies/ nominated banks authorized.
RBI had earlier raised import duties from 6% to 8%. With the export of jewellery being sluggish, the importers will practically not be able to fulfil the criteria. With the shortage of gold in the domestic market, the price in the retail market will increase.
Gold alone accounted for $50 billion of the import bill. The rise in Current Account Deficit (CAD) is one reason for rupee to fall. RBI has removed the distinction between different forms of gold in terms of purity and made the new rule applicable to all forms.
Importers shifted to the raw form of gold which attracts less duty and then is refined and sold in retail. Gold coins too now come under the new import law.
Banks can now give imported gold only to those making jewellery and dealers who supply only to jewellers. This will stop hoarding of the yellow metal by speculative traders. The 20% of the imported gold which is meant for export should be kept in bonded warehouses of the customs.
Over 75% of the gold in the warehouse is exported; only then new order for import will be allowed. SEZ units and those importing gold to re-export will now have no provision to sell a part of the consignment in India.
DGFT looking after foreign trade and customs are given instructions by RBI to monitor the imports. It has withdrawn the restrictions on import through letter of credit and on consignment basis. The duty hike had a dampening effect with imports coming down from 162 tonnes to 31 tonnes, a 81% drop.
Finance minister P Chidambaram had ruled out a ban on import of yellow metal and instead asked the public to buy less gold to help contain the CAD. Crude oil consumption cannot be curtailed but purchase of yellow metal can be done. Trading houses and banks stopped buying and selling gold coins, used for speculative trading.