In order to reduce the domestic consumption of gold, the Reserve Bank of India (RBI) mandated importers of the yellow metal to export at least 20 percent of the gold from the arrived consignment.
Presently, a very small portion of gold is exported and the above move is expected to boost re-export of gold.
Of the 970 tonnes of gold imported last year, only 70 tonnes were exported.
Further, the move would also raise the foreign exchange earnings and stabilise rupee as importers will have to increase the share of export.
Also, this move by the RBI would steer clear of accusations that its measures to reduce the volatility of the rupee affects jobs in the gems and jewellery industry that employs more than 30 lakh people.
Exporters who benefit from the rupee depreciation have been ordered to bring in their US dollar earnings within nine months of shipping or executing orders, instead of 12 months.
In order to contain the current account deficit, the government and the RBI are taking several steps to control gold imports.
Earlier, the government raised import duties on gold to 8 percent from just about 2 percent last year. Furthermore, RBI had made bank funding tough by insisting on near cash payments for any gold import for local needs.
Leave a Reply
You must be logged in to post a comment.