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Gold duty cut may become a sticking point in India-EFTA talks

India is in a spot as its already grappling with a surge in gold imports from its FTA partners, including South Korea and Asean member Indonesia

Press Trust of India  |  New Delhi 

Representative image
Representative image

Elimination of duty on could become a sticking point in the ongoing negotiations for a agreement between and the group, sources said. and the European Association (EFTA) countries -- Switzerland, Norway, Iceland and Liechtenstein -- are in the process of putting in place the agreement, officially known as the and Economic Partnership Agreement (TEPA). is in a spot as it is already grappling with a surge in from its FTA partners, including and member Indonesia. In the bloc, is a major exporter of items, including bars. Given a significant increase in of the precious metal from some of the pact partners, it will be a little tricky for Indian negotiators to agree to complete elimination of duties on from the group, the sources pointed out. is a leading centre in the world for refining and remains one of its major destinations. is the world's second-biggest consumer after China. The mainly take care of demand by the jewellery industry. The two-way between and slumped to USD 19 billion in 2016-17, from USD 21.5 billion in 2015-16.

The gap is highly in favour of the Under a pact, partners offer market access to each other by eliminating or significantly reducing duties with a view to promoting bilateral in goods. Besides, both sides liberalise norms to enhance in services and shore up investments. The has put in restrictions on of items from to check spurt in the in-bound shipments of precious metals from that country. Similarly, the is exploring ways to curb increase in the from Indonesia, which crossed 600 kg during July-August. Increase in puts pressure on the country's current account deficit (CAD), which in turn affects the value of the rupee. Currently, there is a 10 per cent Customs duty on imports, in addition to 3 per cent Integrated GST (IGST).

First Published: Fri, September 29 2017. 21:54 IST