The government has liberalised norms for import of precious metals – gold, silver, platinum and palladium – by select nominated agencies.
In a notification issued this week and taking effect right away, the Director General of Foreign Trade (DGFT) has done away with the mandatory requirement of sale of 15 per cent of imported precious metals to exporters. Besides, it has also relaxed the earlier norms, wherein a nominated agency had to file periodic returns for the imports done.
Explaining the move, an official source said, “The import procedure has been relaxed, as the government’s only concern is the payment of import duty. The authorities will keep a track of imports from periodic filings by these agencies. We will check the disclosure and declaration made during the imports. The nominated agency can sell it to whoever it likes.”
Now, jewellery exporters will have to buy the entire raw material from the open market, which, consequently, takes away a part of the price advantage these importers had in procuring gold/silver.
The source said India was emerging as the main market for gold consumption. The first priority should be to make the metal available to the domestic market at a reasonable price.
Under the monitoring mechanism, nominated agencies other than the designated banks and public sector undertakings had to renew their status certificate every year. They had to file monthly returns to DGFT through the Gems and Jewellery Export Promotion Council, indicating quantities for domestic consumption as well as sale to exporters.
‘More needed’ “This is just a part-relaxation. We had recommended to the government to allow gold imports by all gems and jewellery manufacturers and traders that have an annual turnover of Rs 50-100 crore,” said Vinod Hayagriv, chairman of All India Gems & Jewellery Trade Federation.
Currently, nominated agencies do not have delivery points everywhere. For example, Punjab National Bank has identified only one delivery centre in Bangalore. Nova Scotia Bank, one of the largest importers of gold, is not spread across the country. Therefore, jewellers suffer a lot due to unavailability of gold, especially during the high demand season.
“Since the government has taken the first step, we hope the rest of the demands will also be met by the annual Budget,” said Hayagriv.
The various nominated agencies are designated banks, Minerals and Metals Trading Corporation, State Trading Corporation, gem and jewellery units in export-oriented schemes and in special economic zones (for captive consumption), among others.
