Mumbai, July 11
THE Government has finally made up its mind on further liberalising gold imports by authorising more entities to import in addition to the current list of some 17 agencies that include Government parastatals, star trading houses, and banks.
The Ministry of Finance has decided to expand the number of authorised importers of gold beyond the current designated agencies. For this purpose it is seeking to develop a set of criteria for those persons, agencies and entities who would be authorised to import gold.
The decision is sought to be justified on the ground that it would ensure adequate supply in the market for the benefit of consumers. Early last year, ahead of the general elections, the then Finance Minister, Mr Jaswant Singh, announced the Government's decision to make gold imports free, subject to guidelines to be issued by the Reserve Bank of India.
Mr Singh had asserted that unrestricted imports would help jewellery makers and others to access the yellow metal freely without having to go through intermediaries.
Over the last year and a half, the RBI has issued no guidelines and imports continue to be routed through the designated agencies.
Less than a handful of active players are currently engaged in gold imports.
Some of the active importers are said to be busy trying to postpone the inevitable.
To facilitate issuance of draft circular by the RBI for import of primary gold and silver, the Foreign Trade Division in the Department of Economic Affairs under the Finance Ministry has written to bullion associations seeking their inputs on the set of criteria for authorisation.
Players in the bullion market have welcomed the development, but are not exactly excited.
Speaking to Business Line, Mr Bhargav Vaidya, a bullion analyst, said that all players should be allowed to import.
He added that such imports should be from members of London Bullion Merchants Association (LBMA), but not its associates.
As the capital adequacy norms of LBMA are somewhat tough and such members are regulated, allowing import from full members (and not from associates) would increase the comfort level of importers here, he said.
It is unclear whether the import authorisation would depend on the structure of the entity.
For instance, would corporates alone be permitted, to the exclusion of proprietary and partnership firms?