Indian jewellery industry welcomes withdrawal of 80:20 gold import scheme

December 2, 2014 Posted by admin

Move will help plug smuggling of gold and discourage hoarders

The Dollar Business Bureau

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According to the World Bank, international prices of gold are down around 9.6% from 2013 and are expected to decline around 2% in 2015

 

Representatives of the jewellery industry in India have said that while the withdrawal of the 80:20 import scheme for gold has come as a surprise, it will help in improving transparency and prevent smuggling of gold into the country.

The Gem Jewellery Export Promotion Council (GJEPC), which had requested the government to review the scheme last week, has said, “The jewellery industry views the withdrawal of the 80:20 Scheme as a positive step.” However, it added that importers are unsure about the new procedures. It is expected that the government will announce details after watching the impact of the withdrawal of the 80:20 scheme.

The Indian government had placed import restrictions on gold in August 2013 to reduce the trade deficit. Under the scheme, banks and agencies had to make available 20% of each gold import consignment for exports.

Star Trading Houses and Premier Trading Houses were permitted to import gold under the 80:20 scheme, but industry representatives say that some of the importers did not release the gold into the domestic market and were waiting import restrictions and price hikes. The government’s move to scrap the 80:20 scheme is expected to blunt such hoarders.

There were also concerns about the increase in smuggling and the impact on exports of jewellery from India. Colin Shah, Convener of the Jewellery Panel Committee of the GJEPC, said, “The withdrawal of this scheme is good for the industry and good for the country. The smuggling will stop and it will introduce transparency.”

According to provisional figures from the Ministry of Commerce, India’s exports of Gems and Jewellery entered the negative list in October 2014, declining around 2.25% y/y from around $4 billion recorded in October 2013. Removal of restrictions are expected to boost such exports as well.

 

This article was published on December 1, 2014.

 

Article source: https://www.thedollarbusiness.com/indian-jewellery-industry-welcomes-withdrawal-of-8020-gold-import-scheme/

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