"The domestic jewellery sector is bleeding, with lack of stocks. If the government does not relax the import norms, including the 80:20 rule, the sector is going to witness a major setback," All India Gems & Jewellery Trade Federation (GJF) Chairman Haresh Soni told PTI here.
With the current situation, jewellery manufacturing is expected to see a decline of about 40 per cent this financial year, ending March 31, compared to last year, rendering many artisans jobless, he said.
The Centre tightened norms to curb gold imports which had contributed hugely to the bloating of the Current Account Deficit - difference between outgo and inflow of the forex.
Soni said that without policy relaxation the gold import this year may be even less than 500 tonne. In 2012-13, gold imports stood at 845 tonne.
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The jewellers, he said, are ready to help the government in keeping the gold import at USD 30 billion in value terms.
The 80:20 rule mandates importers to channel at least 20 per cent of the imported gold to jewellery exports. Jewellers are also asked to give proof of the export realisation of the first consignment before seeking delivery of the third tranche from importers.
Besides, the government also increased import duty on gold to 10 per cent and banned inward shipments of gold coins and medallions.
In FY13, about 15-20 per cent of business flow was from Non Resident Indians, he said.
Soni further said the GJF is trying to talk to the government to for immediate measures in order to save the sector, and if it doesn't do anything the industry will resort to a nation-wide agitation.