Government surprises traders with scrapping of gold import rule

In its bid to cut on smuggling and increase legal shipments, the government has withdrawn a rule mandating traders to export 20 per cent of all gold imported into the country.

The surprise move by the government has been good news for jewellers facing difficulties in sourcing gold during festive and wedding season that started in October. Though the rule has been scrapped restrictions on who all can import and who can't are reportedly still valid.

Welcoming the government decision, Pankaj Parekh, Vice Chairman, GJEPC said, “This is a good move because government had linked exports to the domestic consumption which resulted in dummy exports. After this move, dummy exports will stop. Under the new conditions, I wish that there is no shortage of supply for the exporters. We should get seamless supply of raw material gold otherwise exports will suffer”.

Few days ago, there were reports of government relooking at bringing back the control on some trading houses following an increase in imports over the past few months. Last year, the government had imposed 80:20 import rule tying imports to exports of jewellery, besides a record duty of 10 per cent too was imposed.