Under the norms, which the commerce ministry wants to be notified, India will not allow import of gold jewellery from Thailand unless the certificate of origin issued by the Thai government "are verified to our satisfaction".
The Commerce department has asked its Revenue counterpart "to issue notification suspending the import of gold jewellery from Thailand, under the provisions of Early Harvest Scheme till the certificates of origin issued by Thailand are verified to our satisfaction".
More From This Section
Import of gold jewellery from Thailand attract a concessional duty of only 1 per cent under the Early Harvest Scheme, which is a bilateral trade agreement.
However, India impose 10 per cent tax on imports from other countries. According to estimates, the country's gold jewellery import from Thailand stood at $72.25 million from Thailand in 2011-12.
India's total gold jewellery imports were $1.45 billion in 2011-12, with Dubai and Hong Kong among the lead exporters.
The current account deficit (CAD) was at 30-year record high of 4.2 per cent of the GDP in 2011-12. CAD occurs when country's total imports and transfers are higher than its total exports and transfers. High levels of CAD leads to a slew of problems, including deterioration in the currency, to the economy.
India is a big consumer of gold and traditionally the demand for gold is met through imports.