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Commerce and Industry Ministry: Cut Down on Import Duty on Gold
Posted on: 26/Nov/2015 11:36:30 AM
The Commerce and Industry Minister Nirmala Sitharaman has stated that the finance minister need to take under consideration the reduction of duty on gold imports as it may be of help in boosting exports of gems and jewelry sector.
The sector of gems and jewelry is badly affected. I have been insisting on this since day one. We are continuously insisting the finance minister to free it, says Sitharaman.
This sector is facing difficulties in competing in the global market as there is a 10 percent duty on gold imports. However, she added that the finance ministry will take a decision on this proposal based on the current account deficit position (CAD).
There was a dip in the labor intensive gems and jewelry exports in October by 13 percent to USD 3.48 billion. In August, the gold imports has doubled to USD 4.95 billion. This however started to decline in the months of September and October. Higher import of the yellow metal has got its own significance on the country`s current account deficit (CAD).
It is to be noted that India is the largest importer of gold in the entire world. The nation meets the demand of the jewelry industry. There is account deficit when the value of import of goods and services is more than exports.
The CAD got reduced from 1.7 percent (USD 32.4 billion) in 2013-14 to to 1.3 percent of GDP in 2014-15.
Benefits such as 3 percent subsidy and enhanced duty drawback rates are announced by the government so as to surge exports. The minister added that the Commerce Secretary is moving around all states to discuss with the state industry. Different ways of engaging more with the states for boosting outbound shipments is being worked out by the ministry.
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