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Sarbajeet K. Sen

New Delhi , Oct. 9

IN what would be a huge step towards making India a `gold trading hub,' the Government and the Reserve Bank of India are giving the final touches to a major policy liberalisation initiative that would permit all registered export houses to import gold.

Currently, only banks and other nominated agencies authorised by the RBI are allowed to import gold, which is subsequently issued to jewellery exporting units and other bulk users.

A total of 13 banks are active in gold imports at present. As against this, there are around 3,000 export houses registered with the Ministry of Commerce that could participate after the new policy is announced.

"Our dialogue with RBI is progressing very well. We are very close to finalising our plans to permit all registered trading houses to import gold," a top Finance Ministry official said.

However, the officials said that to ensure that the gold route is not misused, it would specifically be mentioned that payments for gold transactions have to be routed through the banking channel.

"We would clearly stipulate that all payments for gold imports have to be made through banking channels," the official said.

The move to allow all registered export houses to import gold would be a major improvement over the suggestions made in the recent report of a committee set up to examine the regulatory structure of the gold industry and to suggest ways of making India a `gold trading hub' like Dubai.

The panel has recommended that in the initial phase of enhanced liberalisation, direct gold imports should be permitted through nominated banks, five-star trading houses (those with over a Rs 5,000-crore export turnover during the last three years) and around 150 members of the London Bullion Markets Association (LBMA).

The committee had said that in the second phase, imports could be allowed through gem and jewellery exporters having a Import-Export Code (IEC) number, provided they are not on the negative or blacklist of the DGFT.

(The committee has members drawn from diverse quarters, including Ministries of Commerce, Finance and Consumer Affairs, RBI, SEBI, DGFT , industry representatives from Assocham and jewellery exporters.)

Two years after the initial liberalisation, direct imports of gold by all may be considered, the panel said.

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