Government amends in gold import policy!

Jul 15, 2023

Government Implements Restrictive Measures on Gold Imports to Promote Indigenous Manufacturing and Protect Artisan Livelihoods.

“The government has curbed imports of gold with specific riders. Imports of gold affect the trade deficit negatively. The latest trade at $22 bn was the highest in 5 months. The reduced gold imports will help balance the same. Heavy gold imports also impact the INR.

Gold imports from UAE are allowed under CEPA to boost trade relations under the pact. Imports from UAE have been dismal despite the pact. Though the steps by the government is to balance the macroeconomics. Gold as a raw material should be available at reasonable prices for the Gems & Jewelry industry to maintain the competitive edge for exports,” said Colin Shah, MD, Kama Jewelry on amendments in gold import policy.

In the row All India Gem and Jewellery Domestic Council (GJC), expressed their views. The unconfirmed report of GJC said, The Indian government has recently imposed new restrictions on gold imports, specifically targeting the import of gold jewellery from ASEAN and South East Asia. This strategic move aims to strengthen the Indian jewellery industry by curbing the disproportionate import of bullion compared to jewellery and fostering local manufacturing capabilities.

Saiyam Mehra, Chairman of the All India Gem and Jewellery Domestic Council (GJC), highlighted the significant disparity between bullion and jewellery imports, stating, “India imports bullion to the tune of 600-800 tonnes per annum, which is substantially higher than jewellery.

India does not import gold jewellery through official sources due to a 20-25% import duty. The import duty on ASEAN was ‘zero’, which resulted in India’s import of gold jewellery to the tune of up to 4 tonnes valued at $112.09 million in April-May 2023, of which $76.28 million came from Indonesia. Now, the restriction will stop such imports and enable jewellery retailers to manufacture all gold ornaments locally” said reliable sources.

The previous practice of importing ornaments for melting in local refineries and selling bullion for higher profits due to duty differentials has raised concerns within the industry. This practice not only affects domestic revenue but also poses a significant threat to the livelihoods of 70-80 lakh (7-8 million) local artisans.

Saiyam Mehra further emphasized the urgent need to discourage the sale of bullion obtained from imported jewellery. He noted that such practices leave only liaising jobs for the local markets and pose a grave risk of rendering numerous local artisans jobless.

Vice Chairman of the GJC, Mr. Rajesh Rokde, added, “With the current change, jewellery imports from ASEAN and South East Asia have been restricted. Now, Indian jewellers can import gold jewellery only through the UAE under the CEPA agreement after paying the required import duty.”

These measures are expected to bolster the growth of the Indian jewellery industry, empowering local manufacturers to produce a wide range of gold ornaments domestically. By reducing reliance on imports, the government aims to create a favorable environment for the development of local artisans and safeguard their employment opportunities.

The All India Gem and Jewellery Domestic Council (GJC) welcomes the government’s decision to impose restrictions on gold imports and stands united with the Indian jewellery industry in its efforts to nurture self-sufficiency and preserve the rich heritage of Indian jewellery craftsmanship said in an unverified statement.

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