GJF urges govt not to impose further curbs on gold imports

Decline in gold prices has resulted in reduced investment demand, GJF stated

The government should not impose further curbs on gold imports as it will spell doom for the gems and jewellery sector, the All India Gems and Jewellery Federation (GJF) said today.

"Since the base of gold imports in September-October 2013 was low, the increase this year may seem very high, however, this cannot be used to impose further restrictions. Decline in gold prices has resulted in reduced investment demand," GJF said in a release while requesting Finance Minister Arun Jaitley and RBI not to impose curbs.

"The gold being imported, is used only for manufacturing jewellery. So, it is unfair of the government to restrict the basic flow of raw material," GJF Chairman Haresh Soni said.

This will result in loss of jobs for lakhs of artisans, he said, adding, the government should stimulate a comprehensive gold policy framework to curb smuggling and dispel internal volatility and uncertainty of supply-demand.

GJF, further said that data of gold imports released in September-October this year was a normal trend.

"The increase in imports was stimulated by advance buying prior to festival time and anticipation of additional curbs on gold imports as indicated by the government," he said.

GJF also pointed out that the year-on-year comparison does not hold good as there were hardly any gold imports during that period due to uncertainty following the imposition of the 80:20 rule, he said.

The federation has alleged that the uncertainty created by the government is boosting higher imports.

GJF Director Bachhraj Bamalwa said that gold cannot be made the sole culprit for widening CAD as the prices have fallen around 38 per cent to around $1,200 an ounce since the peak of USD 1920 in 2011.