DGFT for nominated agency status to gold refiners

Gold refiners in India may get ‘nominated agency’ status from the Directorate General of Foreign Trade (DGFT) to import gold dore bars. Officials explained this may happen if the Reserve Bank of India (RBI) does not agree to allow free gold dore import.

Sources say based on a proposal by the commerce ministry, the Department of Economic Affairs (DEA) under the Ministry of Finance, has already initiated discussions with RBI. A gold dore bar is a semi-pure alloy of gold and silver, usually created at the site of a mine. It is then transported to a refinery for further purification. After gold ore is mined, the first stage of purification produces a cast bar (gold dore) that is approximately 90 per cent gold. The other 10 per cent is metals like silver and copper.

RBI governs the import of the yellow metal, since gold is considered dual currency for reserve purposes, explained an official. Gold dore, said the official, is primarily a raw material. As a result, there are no exchange-related worries if it is imported and used for making gold jewellery.

“With the number of refineries growing in India, availability of raw material is an issue. Alte-rnatively, gold refiners depend only on scrap, which is not available readily for use. People hold on to scrap in anticipation of benefiting from rising gold prices,” said an industry source.