Bullion traders approach govt over high gold premium

Seek relief in gold import norms in the wake of reduced gold availability

The business seems to have lost glitter in the past couple of months. An increase in the import duty, exorbitant commissions charged by importing agencies and a lack of availability for domestic jewellers has left traders wading through choppy waters.

Traders have sought relief from the central government. Recently, representatives of the All India and Jewellers Association (AIBJA) met the director general of foreign trade and senior government officials, including the revenue secretary and the economic affairs secretary, to air their grievances.

“We have given some suggestions to the government with regard to the import policy. Only a positive outcome can save this industry from a crisis. The current policy makes smuggling attractive and it has also created a monopoly of a few agencies designated for imports. This is against fair market practices. Also, a large number of jewellers and goldsmiths are on the verge of closure due to non-availability of gold,” said M C Jain, president, AIBJA.

Goldsmiths and artisans are also a worried lot, as there is negligible business even in the peak festive season. It is feared that the sector might witness widespread unemployment as over two million people, mainly in Gujarat, Kolkata and Coimbatore, are engaged in and related businesses.

The official import numbers show a sharp decline since July. The imports have been minimal, in the range of 5-12 tonnes during recent months against 161 tonnes reported in May this year.

In its representation to the Union Finance Minister, AIBJA, among other measures, has demanded that the on imports be reduced from 10 per cent to six per cent.

The premium on for physical delivery has increased from $30 an ounce (an ounce = 31.1g) to $80-100 an ounce in a month’s time. “I have never seen such a high premium. A few years back, the maximum premium paid was up to $45 an ounce,” said a trader from Ahmedabad.

“Only a few importing agencies are given licences to import under the Reserve Bank of India (RBI)’s norms. Jewellery making is a small industry in India but it employs a huge workforce. Non-availability of has resulted in a jobless workforce. Even at the time of Diwali, workers are sitting idle,” said Jagdish Acharya, a trader.

“The has increased by 30 times since 2000, when it was just Rs 100 for 10g. Now, it has been increased to Rs 3,000 for every 10g. Notably, during the same period, prices have increased by merely five-six times,” Jain stated.

According to AIBJA, the increase in has made costlier by Rs 3 lakh a kg. “This has given rise to smuggling in India from neighbouring countries like Bangladesh, Nepal and Pakistan,” said a member of AIBJA. The association noted that nominated agencies for imports were charging unreasonably high commissions of up to $100 per ounce or Rs 2 lakh a kg.

image
Business Standard
177 22
Business Standard

Bullion traders approach govt over high gold premium

Seek relief in gold import norms in the wake of reduced gold availability

Rutam Vora & Kalpesh Damor  |  Mumbai 

The business seems to have lost glitter in the past couple of months. An increase in the import duty, exorbitant commissions charged by importing agencies and a lack of availability for domestic jewellers has left traders wading through choppy waters.

Traders have sought relief from the central government. Recently, representatives of the All India and Jewellers Association (AIBJA) met the director general of foreign trade and senior government officials, including the revenue secretary and the economic affairs secretary, to air their grievances.


“We have given some suggestions to the government with regard to the import policy. Only a positive outcome can save this industry from a crisis. The current policy makes smuggling attractive and it has also created a monopoly of a few agencies designated for imports. This is against fair market practices. Also, a large number of jewellers and goldsmiths are on the verge of closure due to non-availability of gold,” said M C Jain, president, AIBJA.

Goldsmiths and artisans are also a worried lot, as there is negligible business even in the peak festive season. It is feared that the sector might witness widespread unemployment as over two million people, mainly in Gujarat, Kolkata and Coimbatore, are engaged in and related businesses.

The official import numbers show a sharp decline since July. The imports have been minimal, in the range of 5-12 tonnes during recent months against 161 tonnes reported in May this year.

In its representation to the Union Finance Minister, AIBJA, among other measures, has demanded that the on imports be reduced from 10 per cent to six per cent.

The premium on for physical delivery has increased from $30 an ounce (an ounce = 31.1g) to $80-100 an ounce in a month’s time. “I have never seen such a high premium. A few years back, the maximum premium paid was up to $45 an ounce,” said a trader from Ahmedabad.

“Only a few importing agencies are given licences to import under the Reserve Bank of India (RBI)’s norms. Jewellery making is a small industry in India but it employs a huge workforce. Non-availability of has resulted in a jobless workforce. Even at the time of Diwali, workers are sitting idle,” said Jagdish Acharya, a trader.

“The has increased by 30 times since 2000, when it was just Rs 100 for 10g. Now, it has been increased to Rs 3,000 for every 10g. Notably, during the same period, prices have increased by merely five-six times,” Jain stated.

According to AIBJA, the increase in has made costlier by Rs 3 lakh a kg. “This has given rise to smuggling in India from neighbouring countries like Bangladesh, Nepal and Pakistan,” said a member of AIBJA. The association noted that nominated agencies for imports were charging unreasonably high commissions of up to $100 per ounce or Rs 2 lakh a kg.

RECOMMENDED FOR YOU

Bullion traders approach govt over high gold premium

Seek relief in gold import norms in the wake of reduced gold availability

Seek relief in gold import norms in the wake of reduced gold availability
The business seems to have lost glitter in the past couple of months. An increase in the import duty, exorbitant commissions charged by importing agencies and a lack of availability for domestic jewellers has left traders wading through choppy waters.

Traders have sought relief from the central government. Recently, representatives of the All India and Jewellers Association (AIBJA) met the director general of foreign trade and senior government officials, including the revenue secretary and the economic affairs secretary, to air their grievances.

“We have given some suggestions to the government with regard to the import policy. Only a positive outcome can save this industry from a crisis. The current policy makes smuggling attractive and it has also created a monopoly of a few agencies designated for imports. This is against fair market practices. Also, a large number of jewellers and goldsmiths are on the verge of closure due to non-availability of gold,” said M C Jain, president, AIBJA.

Goldsmiths and artisans are also a worried lot, as there is negligible business even in the peak festive season. It is feared that the sector might witness widespread unemployment as over two million people, mainly in Gujarat, Kolkata and Coimbatore, are engaged in and related businesses.

The official import numbers show a sharp decline since July. The imports have been minimal, in the range of 5-12 tonnes during recent months against 161 tonnes reported in May this year.

In its representation to the Union Finance Minister, AIBJA, among other measures, has demanded that the on imports be reduced from 10 per cent to six per cent.

The premium on for physical delivery has increased from $30 an ounce (an ounce = 31.1g) to $80-100 an ounce in a month’s time. “I have never seen such a high premium. A few years back, the maximum premium paid was up to $45 an ounce,” said a trader from Ahmedabad.

“Only a few importing agencies are given licences to import under the Reserve Bank of India (RBI)’s norms. Jewellery making is a small industry in India but it employs a huge workforce. Non-availability of has resulted in a jobless workforce. Even at the time of Diwali, workers are sitting idle,” said Jagdish Acharya, a trader.

“The has increased by 30 times since 2000, when it was just Rs 100 for 10g. Now, it has been increased to Rs 3,000 for every 10g. Notably, during the same period, prices have increased by merely five-six times,” Jain stated.

According to AIBJA, the increase in has made costlier by Rs 3 lakh a kg. “This has given rise to smuggling in India from neighbouring countries like Bangladesh, Nepal and Pakistan,” said a member of AIBJA. The association noted that nominated agencies for imports were charging unreasonably high commissions of up to $100 per ounce or Rs 2 lakh a kg.
image
Business Standard
177 22

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard