The government is considering incentives for gold jewellery exporters hit by restrictions imposed on import of the metal to contain current account deficit (CAD).
“Government is looking at the demands of gold jewellery exporters for hiking duty drawback rate to 8 per cent and removal of restrictions on sale of gold in the domestic market,” a government official said.
Although the government has increased the duty drawback rate to 6 per cent from 4 per cent, the exporters are saying that it was not enough and the rate should be increased to at least 8 per cent.
Duty drawback is the refund of duties on imported inputs for export items.
“Our only demand is that we should be provided gold on easy terms. We have also asked to take steps to reduce transactions cost for us,” Gems and Jewellery Export Promotion Council (GJEPC) Vice Chairman Pankaj Kumar Parekh said.
Jewellery exports are expected to decline by about 20 per cent in the current fiscal due to limited availability of gold inventory in the domestic market following the government’s steps to curb demand.
India exported $39 billion worth various precious gems and jewellery in the 2012—13.
The government and the Reserve Bank have been taking steps to curb the gold imports, which have averaged 152 tonnes in April and May, resulting in foreign exchange outgo of about $15 billion.
Gold and silver imports in April jumped by 138 per cent to $7.5 billion, as against $3.1 billion in the year—ago period. Due to high gold imports, the country’s trade deficit in April widened to $17.8 billion year on year.