Govt mulls curb on gold imports post Diwali

New Delhi: The government is mulling over reimposing some restrictions on gold imports after Diwali as higher inward shipments of the metal in the last few months have pushed up the trade deficit, a government official said.

The Commerce Ministry has called a meeting post Diwali inviting representatives from RBI and stakeholders of bullion and gold industry to discuss the matter, the official added. "Gold imports have been rising in the last few months. We are going to relook the import norms again and see what can be done to address the issue," said a government official. Gold imports have surged ever since the import norms were relaxed.

Monthly gold imports - which averaged 10-15 tonnes till June - increased to 38.3 tonnes in July, 63 tonnes in August and 92 tonnes in September, as per the industry data. India's exports grew marginally by 2.73 per cent in September, but a surge in gold imports pushed the trade deficit to about 18-months high of USD 14.2 billion.

That apart, the official said: "Bullion dealers have also raised some concerns, which will be discussed in detail in a meeting likely to be held after Diwali." The meeting will deliberate on restricting again the premium and star trading companies from gold imports in view of complaints received by the domestic bullion industry, the official said.

Gold jewellery and bullion industry have made representation to the government that their business is being affected with premium and star trading firms not selling imported gold to them for further exports, the official added. As per the import norms, 20 per cent of gold imports have to be exported. Banks and nominated agencies normally sell 20 per cent of imported gold to domestic bullion and jewellery makers, who further make products for export purpose.

"But the premium and star trading agencies are not selling imported gold to these players. They are exporting themselves through their own units. This has been affecting other players in the industry. The meeting will discuss all these issues," the official said. On May 21, the government had relaxed import norms by permitting nine premium and star trading companies like MD Overseas and Rajesh Exports to import gold along with banks and nominated trading agencies like MMTC and STC.