GJF urges govt to avoid imposing new curb on gold import

Government should avoid imposing new curb on gold imports as the move can 'spell doom' for the gems and jewellery sector, All India Gems and Jewellery Federation (GJF) said today.
In the wake of surge in gold imports, the government is likely to impose some curbs on inward shipments to prevent current account deficit (CAD) from going out of hand.
"GJF has urged Finance Minister Arun Jaitley and the Reserve Bank of India to avoid imposing curbs on gold imports as it could spell doom for the gems and jewellery sector," the industry body said in a statement.
Gold import surged almost four times to 4.17 billion in October from USD 1.09 billion from the year-ago period.

In value terms, gold imports have touched 150 tonnes in October, as against 24 tonnes during the same period a year ago.
The high imports have pushed up country's trade deficit to USD 13.35 billion as against USD 10.59 billion in October 2013.

GJF also said that importers have not yet distributed gold imported in September-October 2014 and is hoarding the precious metal in anticipation of higher profits resulting from further curbs and restrictions to be announced by the government.
Disputing some of the data of gold imports released in September-October 2014, GJF claims that the rise in gold imports in September-October 2014 is a normal trend.

This increase was stimulated by advance buying before the festival season and anticipation of additional curbs on gold imports as indicated by the government, the statement added.
GJF Chairman Haresh Soni said, "Since the base of gold imports in September-October 2013 was low, the increase in September-October 2014 may seem very high but this comparison cannot be used to impose further restrictions."
As part of its self-regulation initiative, GJF said it has already proposed curb on sale of gold coins and bars by its members to restrict their demands that account for approximately 300 tonnes, according to a joint report by FICCI and AT Kearney.

Soni also added that gold prices have fallen and investment demand in gold has reduced drastically due to negative returns. Therefore, the gold, which is being imported, is purely used for manufacturing jewellery and not for investment purposes.