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India's gold imports will jump to over 700 tonnes in the current financial year as against 500 tonnes in 2016-17, a top industry association said on Monday.
Addressing a press conference, Gems and Jewellery Export Promotion Council (GJEPC) Chairman Praveenshankar Pandya demanded that the import duty on gold be brought down to 4-5 per cent in the Budget, asserting that the prevailing 10 per cent import duty on the yellow metal gives rise to smuggling.
"The degree of difficulty of doing business in India and the import duty of 10 per cent is hampering our growth," he said.
However, Sabyasachi Ray, Chief Executive Director, GJEPC, said, "We imported 500 tonnes of gold in 2016-17. This year, we will import around 700 tonnes."
According to GJEPC, the introduction of 5 per cent VAT in Dubai from January 2018 and the imposition of 5 per cent import duty on gold and diamond jewellery by the Gulf nation in January this year, are bound to hit India's exports from the sector.
Dubai acts as a major transit point and accounts for over 50 per cent of the $7.5 billion gold jewellery exports from India.
The Council expects gems and jewellery exports to remain flat at $43 billion in the current financial year, on account of sluggish demand in international market, proposed introduction of VAT and imposition of imports duty by Dubai, and teething problems under the GST regime.
Besides, Ray said the Niti Aayog and Department of Economic Affairs are working on a gold policy, and "most probably it will be announced in the Budget".
He said that post the announcement, there will be a uniform policy for gold and a regulator will be in place to implement it. The policy, he said, will address issues including standardisation, imports, exchange mechanism for gold and refineries, etc.
The Council also demanded an authority like a Gold Board in India "to put a full stop to misuse of policies", claiming that 30-40 tonnes of gold had come without payment of import duty under the free trade pact between India and Korea until it was plugged.
Pandya also demanded that the government should extend the Merchandise Exports from India Scheme (MEIS) to the gems and jewellery sector.