India's gold imports to be over 700 tonnes in current fiscal, up 40%, says industry body

New Delhi: India's gold imports will jump to over 700 tonnes in the current fiscal as against 500 tonnes in 2016-17, a top industry association said on Monday.

Addressing a press conference here, Gems and Jewellery Export Promotion Council (GJEPC) Chairman Praveenshankar Pandya demanded that the import duty on gold be brought down to 4-5 percent in the Budget, asserting that the prevailing 10 percent import duty on the yellow metal gives rise to smuggling.

"The degree of difficulty of doing business in India and the import duty of 10 percent is hampering our growth," he said.

However, Sabyasachi Ray, Chief Executive Director, GJEPC, said, "We imported 500 tonnes of gold in 2016-17. This year, we will import around 700 tonnes."

Representational image. Reuters.

According to GJEPC, the introduction of 5 percent VAT in Dubai from January 2018 and the imposition of 5 percent import duty on gold and diamond jewellery by the Gulf nation in January this year, are bound to hit India's exports from the sector.

Dubai acts as a major transit point and accounts for over 50 percent of the $7.5 billion gold jewellery exports from India.

The Council expects gems and jewellery exports to remain flat at $43 billion in the current fiscal, on account of sluggish demand in international market, proposed introduction of VAT and imposition of imports duty by Dubai, and teething problems under the GST regime.

Besides, Ray said the NITI Aayog and Department of Economic Affairs are working on a gold policy, and "most probably it will be announced in the Budget".

He said that post the announcement, there will be a uniform policy for gold and a regulator will be in place to implement it. The policy, he said, will address issues
including standardisation, imports, exchange mechanism for gold and refineries, etc.

The Council also demanded an authority like a Gold Board in India "to put a full stop to misuse of policies", claiming that 30-40 tonnes of gold had come without payment of import duty under the free trade pact between India and Korea until it was plugged.

Pandya also demanded that the government should extend the Merchandise Exports from India Scheme (MEIS) to the gems and jewellery sector.