The All India Gem and Jewellery Domestic Council has urged the government to roll back the hike in gold import duty from 12.5 per cent to 10 per cent, and implement a comprehensive integrated ‘gold policy’ to save the gem and jewellery business.

The import duty of 12.5 per cent and a GST of 3 per cent has made gold jewellery costlier and has impacted consumer sentiment leading to postponement of fresh purchase.

The lack of demand in gems and jewellery has resulted in many craftsmen and artisans shifting to other businesses, besides many workers in the sector committing suicide. It has also threatened jobs of a 55 lakh labour force engaged in the business and the livelihood of their families, said GJC.

The GJC’s recommendations are also echoed by the India Gold Policy Centre, set up by IIM-Ahmedabad, which has called for a comprehensive integrated gold policy, which would include setting up of a gold board and the advent of bullion banks.

The IGPC said that bullion banking would enable banks to source locally, finance bullion and refining business, and finance refineries to import dore or unrefined gold. It would also allow them to hedge their positions on Indian exchanges, create gold-backed products that help reduce dollar outflows and export refined bullion.

Anantha Padmanaban, Chairman, GJC, said the government should roll back the gold import duty till the time revised gold monetisation is implemented, as that is the only feasible substitute to reduce gold imports.

The import duty on gold was levied to curb the Current Account Deficit (CAD) but India’s fiscal deficit narrowed down last fiscal.

On the one hand, the government talks of taking Indian craftsmanship to the world, while on the other, its policies are making skilled artisans leave the business. Such policies are not in sync with ‘Make in India’ or the ease of doing business, he said.

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