DGFT asked to come up with uniform norms for easing gold sales

In an effort to ensure small jewellers and traders are not marginalised, the Government is working on a set of “common principles” for banks, public sector agencies and large private traders on gold sales.

The Department of Revenue has instructed the Directorate General of Foreign Trade (DGFT) to look into the matter and come up with a workable solution.

This follows a Delhi High Court direction to the Centre asking it to resolve the problem of availability of gold to small players, highlighted in a writ petition filed by the Delhi Bullion and Jewellers Welfare Association (DBJWA). “The selling norms of all entities are different. Banks have a policy of favouring old and preferred customers. Some PSUs such as MMTC do it on a ‘first-come, first-served’ basis, while some such as PEC conduct auctions. The private sector functions on its own. We are trying to lay down some common principles, if not enforceable guidelines, for all,” a Commerce Ministry official told BusinessLine .

The DBJWA had contested a decision of the former UPA Government taken in May, just days before demitting office, to ease gold import rules for star trading houses and premium trading houses. The association claims that large trading houses will now end up controlling the domestic gold market, leaving small players out in the cold.

“Because of the Government’s orders, bullion import went into limited hands,” said Vimal Goel, President of DBJWA. The association now wants the decision to be reserved so that small traders and jewellers also have access to enough gold.

Last year, restrictions were imposed on import of gold by the Government to bridge the widening current account deficit. Gold imports reduced considerably following the restrictions, but have shot up again after the erstwhile UPA Government removed restrictions on large traders.

“While the issue of easing import norms for large traders will be examined by the RBI and the Finance Ministry, what the DGFT has been asked to do is to see that small traders and jewellers also have access to gold available within the system,” the official said.

The DGFT is holding meetings with all the stakeholders to narrow down on what the common guidelines could be, and it is turning out to be a difficult task.

“Our job is to brainstorm. The mandate given by the High Court is to resolve the issue, and our consultations are on. We have to see if something workable comes out,” the official added.

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