Commerce & Industry Ministry for cut in import duty on gold
Finance Ministry should consider reduction of duty on gold imports as it would help boosting exports of gems and jewellery sector, Commerce and Industry Minister Nirmala Sitharaman has said.
“That I am saying since day one because gems and jewellery sector has been very badly affected. So we have been telling the Finance Minister if it is possible to free that.” Sitharaman told PTI when asked whether the ministry has proposed duty reduction on gold imports.
She said the sector is finding it difficult to compete in the global market because of 10 percent duty on gold imports. However, the minister added the Finance Ministry may look at the current account deficit (CAD) position before taking decision on the proposal.
Labour intensive gems and jewellery exports in October dipped by about 13 percent to USD 3.48 billion.
Gold imports more than doubled to USD 4.95 billion in August. But it started declining in September and October. Higher import of the yellow metal has adverse bearing on India’s current account deficit (CAD).
India is the largest importer of gold in the world, which mainly caters to the demand of the jewellery industry. Current account deficit happens when value of import of goods and services is more than that of exports.
The CAD in 2014-15 shrank to 1.3 percent of GDP (USD 27.5 billion) from 1.7 percent (USD 32.4 billion) in 2013-14.
On the country’s overall exports, Sitharaman said the government has announced benefits such as 3 percent interest subsidy and enhanced duty drawback rates to push exports.
“The Commerce Secretary is going around to all the states to talk with the state industry’s (to discuss ways to enhance exports),” she said. The ministry is working on ways to engage more with the states to boost the outbound shipments.
Exports during April-October period this fiscal dipped by 17.62 percent to USD 154.29 billion as against USD 187.2 billion last year. The trade deficit during the first seven months of the current fiscal has shrunk to USD 77.76 billion as against USD 86.26 billion last fiscal.
Read full article: Money Control
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