Shares of six jewellery firms fell by 0.26% to 0.23% at 13:00 IST on BSE on reports the Reserve Bank of India and the finance ministry are considering fresh curbs on gold imports.
Meanwhile, the S&P BSE Sensex was up 11.13 points or 0.04% at 28,189.01.
Among jewellery makers, Shree Ganesh Jewellery House (down 0.96%), Gitanjali Gems (down 0.26%), Tribhovandas Bhimji Zaveri (down 2.23%), Tara Jewels (down 2.11%), Titan Company (down 0.7%) and PC Jeweller (down 1.69%) declined.
The Reserve Bank of India (RBI) and the finance ministry are reportedly considering fresh curbs on gold imports, as inbound shipments of the yellow metal surged four times to $4.18 billion in October 2014 over October 2013. Gold import touched 115-120 tonnes in October, as against 24 tonnes a year ago.
With the surge in gold imports, it warranted a relook. Discussions are still going on between RBI and the government. Once we know what the discussions are, a further view will be taken, RBI Deputy Governor S S Mundra quoted by media as saying on Monday, 17 November 2014. Crude oil and gold are two major items adding to the import bill. Officials from the central bank and the finance ministry had reportedly met last week to discuss ways to restrict inbound shipments of gold but no final decision was taken.
The increase in gold imports will widen the trade deficit, which in turn will make the current account deficit (CAD) swell. Curbs on gold were introduced by former finance minister P Chidambaram to contain the CAD, which had touched a record high of $88.2 billion or 4.8% of gross domestic product in 2012-13.
However, in May this year, some of those restrictions were eased after imports came down and the CAD narrowed to 1.7 per cent in 2013-14.
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