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Gems and jewellery traders have asked the government to cut down the duty on gold to 2% from current 10%.
"We have suggested that the customs duty should now be reduced to 2% from the current 10% to help check the smuggling of the precious metal, which is impacting the government coffers, now that the current account deficit (CAD) is under control," All India Gems and Jewellery Trade Federation (GJF) said in its budget wish-list.
"Keeping in mind, Prime Minister's vision of promoting 'Make In India' brand we have to protect and nurture our indigenous industry. Both oil and gold prices globally have fallen substantially now vis-a-vis last few years.
"We propose that the difference between import duty of raw material (gold and silver) and finished jewellery (gold and silver) to be maintained at minimum 10% (for gold) and 15% (for silver)," GJF Chairman Haresh Soni said.
At present, the current account deficit (CAD) is under control due to reduction in global gold prices (40% down) to $1,200 from $1,900.
Fortunately, crude prices (which account for the highest bill for imports) have reduced 60% in last six months, he said.
According to GJF, high import duty on gold has neither helped the government nor the trade and instead smuggling has increased.
GJF also reiterated its demand for the government to formulate a comprehensive gold policy for India and make the country a global jewellery hub.
It has also asked the government to exclude jewellery from all bilateral or multi-lateral free trade agreements (FTAs).
"We also urge the government to create a comprehensive gold mining policy for domestic exploration and for cluster development for 'Make in India' fashion jewellery. This will also encourage NRIs to buy jewellery from India," Soni added
GJF the national nodal and the largest single trade body in India for the promotion and growth of trade in gems and jewellery across India.
It represents over 6,00,000 players comprising manufacturers, wholesalers, retailers, distributors, laboratories, gemologists, designers and allied services to the domestic gems and jewellery industry.
