No plan to cut gold import duty, says Sitharaman

The government is not planning any immediate cut in gold import duty despite the current account deficit (CAD) scaling down, Commerce Minister Nirmala Sitharaman said Wednesday.

"I cannot say that gold smuggling has increased because of hike in import duty. The CAD (current account deficit) has come down, but there is no thought to lower the import duty immediately," Sitharaman said addressing the media here on the initiatives her ministry has taken in the first 100 days of the NDA regime.

The government last year hiked the import duty on gold to 10 percent to curb imports and help reduce the CAD.

India's deficit for the first quarter this fiscal ending June came down to 1.7 percent of the gross domestic product (GDP) compared to 4.8 percent during the same quarter of 2013-14.

It stood at $7.8 billion for the first quarter of 2014-15 compared to $21.8 billion during the corresponding quarter last fiscal, data released by the Reserve Bank of India (RBI) last week showed.

"Decline in imports was primarily led by a steep decline of 57.2 percent in gold imports, which amounted to $7 billion, significantly lower than $16.5 billion in Q1 of 2013-14," the RBI said in a statement.

The minister also said that a new Foreign Trade Policy (2014-19) will also be unveiled very soon.

The new policy would include strategy, goals, road map and time-frame for increasing exports, Commerce Secretary Rajiv Kher, who was present on the occasion, said.

Regarding the long drawn out negotiations on a free trade agreement (FTA) with the European Union (EU), Sitharaman said she recently told EU ambassador here that "nothing stops us from agreeing on an FTA, but they (EU) should come back to us if they are interested."