Will look into lifting gold import curbs, says Chidambaram

Finance Minister P Chidambaram today said he will look into removing restrictions on import of gold in the wake of government reining in the current account deficit in the current fiscal at $45 billion.

"I can only look into it," he told PTI in an interview.

The gems and jewellery industry has been clamouring for relaxation in gold import curbs and reduction in duty especially after the Finance Minister outlined in Budget to contain the Current Account Deficit (CAD).

In the Interim Budget 2014, Chidambaram has said that the CAD will be halved to $45 billion in the current fiscal, from $88.2 billion or 4.8% of GDP in 2012-13.

The CAD had touched a record high last fiscal as gold imports soared 845 tonnes last fiscal.

"India cannot afford to import gold of $50-60 billion. People must understand that every ounce of gold is imported," Chidambaram had said yesterday.

The gold imports had risen to over 300 tonnes in the first two months (April-May) of the current fiscal.

The government raised import duty on the precious metal three times taking it to 10% and also made it mandatory to export 20% of the total gold imported.

    Following this gold imports came down to 19 tonnes in November. The CAD too was brought down to 3.1% in April-September of current fiscal, from 4.5% in the same period last year.

In its response to the Budget, Gems and Jewellery Trade Federation said: "We urge the government to keep import duties on gold low to eliminate smuggling and immediately remove the 80:20 rule while allowing consignment gold imports to ensure fair open market controlled business".