RBI must ensure greater participation of banks in gold imports: NITI Aayog

The RBI should ensure greater participation by banks for import of gold to assure necessary supply of the precious metal to jewellery exporters, a report by government think tank Niti Aayog has suggested.

A Niti Aayog committee, headed by its Principal Adviser Ratan P Watal, also recommended that the design of Duty Drawback Scheme for gold imports needs to be reviewed and changed to ensure full duty drawback on gold for the purpose of jewellery export.

"The banks are the nominated agencies for import of gold. There are very few banks active in their role as the nominated agencies for gold imports," the report highlighted.

"The committee recommends that the RBI ensure greater participation by the banks to enter the gold business thereby ensuring the necessary supply of gold to the exporters," it said.

The report, Transforming India's Gold Market, further suggested that given the significance of gold jewellery exports to Gulf countries, it may be prudent to explore duty-free import and export of gold with these countries.

In 2016, around USD 4 billion worth of gold jewellery was exported to the UAE, accounting for more than half of the total Indian jewellery exports.

The committee also recommended that a set of policies need to be deliberated upon with the Courier Agencies to enable the supply-chain for gold jewellery exports and also to assist the penetration of Gold Monetisation Scheme (GMS).

The panel was formed to suggest measures for stimulating gold and jewellery exports and transforming the gold market ecosystem in the country.