Jewellers want gold import duty cut to 2%

With the Reserve Bank of India easing gold import norms, jewellers are now pitching for a reduction in import duty from 10 per cent to two per cent.

Speaking on the sidelines at the India Gold Summit held here on Friday, Sanjeev Agarwal, CEO, Gitanjali Exports, said with the gold price difference of 22 per cent between India and Dubai, the demand for the yellow metal is fast shifting from the legal channel to smuggling which was estimated at 200 tonnes this year.

A family of four flying from India to Dubai can cover their entire holiday expenses if they fly back with quantum of gold jewellery legally allowed and sell it in India, he said.

Under the Customs rules, travellers must declare bullion and gold jewellery exceeding the free allowance, which is capped at ₹50,000 for men and ₹100,000 for women.

The short supply of gold due to import restrictions has pushed up the premium paid by jewellers to 12 per cent in recent times and with import duty of 10 per cent, the price difference in India and the international markets work out to 22 per cent, leading to a substantial increase in smuggling.

The industry, said Agarwal, has made a representation to the Government to set a separate ministry for bullion to frame policy to harness the complete potential. He said there are five secretary-level officers to oversee the demand of leather industry which generates business of $10 billion, while bullion sector with a potential of $50-billion domestic market and export opportunity of $25 billion has one joint secretary level officer to deal with.

The bullion industry has called for jewellery manufacturing hubs where companies can share their resources. Since the cost of jewellery making machines are high, companies in the hub can even think of hiring machines on rental basis, he said.

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