The government has come out with the final guidelines which would make gold imports easier. Under the new norms announced last week, at least 10% of gold imported by an entity will have to be supplied to local exporters. The move may benefit smaller exporters and jewellers in tier II cities who often find it difficult to procure gold.

All nominated agencies will have to maintain records of precious metal imports, purchases by exporters and the extent of domestic consumption.

These agencies will also have to file returns every month to the Gem and Jewellery Export Promotion Council (GJEPC) which shall compile the figures and submit the data to the Directorate General of Foreign Trade (DGFT). In February, DGFT had notified that it would permit additional agencies to import the yellow metal.

The new agencies permitted are GJEPC and Diamond India Ltd, a trade body, among others. GJPEC chairman Vasant Mehta said nominated agencies often could not ensure timely supply to factories located in tier II cities.

"Following this problem, we had asked the government to recognise GJEPC as one of its nominated agencies to import gold," he said. He added that the council would soon work on how to proceed further.

GJEPC's Konal Doshi said the council would initially import gold for exporters making value added products. GJEPC has 6,000 members across the country and will begin imports this year. Of the 700 tonnes of gold imported annually, close to 10-12% is for exports.

Other new agencies that have been included are MSTC, STCL and star trading houses (in the gems and jewellery sector). Earlier, the government had permitted imports only through designated banks notified by RBI and agencies like MMTC, State Trading Corporation, Projects and Equipment Corporation of India, Handicraft and Handloom Export Corporation and export oriented units.

Mumbai-based bullion consultant BN Vaidya and Associates’ Bhargava Vaidya said: "In the current structure, small exporters find it very hard to procure gold from banks and other agencies. The move is aimed at increasing the transparency and simplifying the process."

He said since existing agencies often charge extra margins, more agencies would help. "Banks are wary of new customers." The notification comes at a time when gold prices are touching record highs. India, the world’s largest importing country, has registered near zero imports in February and March.

Source: ET