Gold import curbs at least till March: Mayaram

Gold imports fell to 19 tonnes in Nov from a high of 162 tonnes in May in the wake of a series of curbs by both the government and the RBI

The restrictions on gold imports are likely to continue till at least March-end, despite an improvement in the current account deficit (CAD). “Our point is we need to keep the CAD low. And whatever is to be considered should be considered the next year after fully understanding how the CAD will look for the next year,” Economic Affairs Secretary Arvind Mayaram said.

He said his ministry had gotten various suggestions and one view was to open up gold imports as demand has been compressed significantly.

Recently, Finance Minister P Chidambaram, too, said some curbs on gold imports remain in force. However, Reserve Bank Governor Raghuram Rajan favours doing away with the restrictions, which encourage smuggling.

Gold imports fell to 19.3 tonnes in November from a high of 162 tonnes in May in the wake of a series of curbs.

The government had increased customs duty on gold to 10 per cent while the RBI linked imports of the metal to exports amid a widening CAD and depreciation of the rupee.

Asked if the restrictions had led to smuggling, Mayaram said there was no "conclusive evidence" to support the argument.

"What is the total compression in gold we are looking at? About 100-150 tonnes. What are the total seizures you get? It is minuscule.

"So, if you look at the trade off, we need to increase vigilance and surveillance to be able to check any rise in smuggling. But at the same time, we cannot afford to allow CAD numbers to become weak because it has a bearing on how the rupee behaves," the Secretary added.