Gold rallied more than two percent on Thursday and many were quick to point to a potential roll back in gold import rules after Congress President Sonia Gandhi wrote to the Commerce Ministry asking it to consider a relaxation of the 80:20 import rule imposed on gold.
Under the 80:20 rule, new gold imports are not allowed until 20 per cent of the previous shipments are exported as jewellery.
Under the 80:20 rule, new gold imports are not allowed until 20 per cent of the previous shipments are exported as jewellery.
The request was made after the All India Gems and Jewellery Trade Federation sought Sonia’ intervention to ease restrictions as India’s appetite for gold has caused smuggling incidents to increase after the import duty rose from an initial 2 percent in January 2012 to the current 10 percent.
The government raised the import duty on gold thrice in 2013 to curb the inflow of the yellow metal and help narrow the widening current account deficit which had caused a sharp slide of the rupee against the dollar.
According to the finance ministry data, gold imports increased significantly by 87 percent from 205 tonnes in April-July 2012 to 383 tonnes in April-July 2013.
However, those hoping that the appeal to revoke the rule or cut export taxes on gold is in for a disappointment as the Finance Minister, P Chidambaram who is currently attending the World Economic Forum at Davos, said that the regulations will only be relooked when the country comes to a firm grip on its current account deficit (CAD). Read more..
Source: Hindi News Live
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