The Reserve Bank on Monday set stringent conditions for importers, linking inward shipments to future exports, a decision that will make gold prices costlier. Banks and authorized agencies will have to ensure that at least 20 per cent of imported gold is made available for exports, the Reserve Bank said.
Importers will be required to keep 20 per cent of the consignment with customs bonded warehouses, the central bank added.
The RBI also included dore, or unrefined gold, for the first time in its restrictions, clamping down on a loophole in import duty which was hiked to 8 per cent but currently only on refined gold.
"This will make our life miserable, these are indirect ways of restrictions on imports (for domestic jewellers)," said Haresh Soni, chairman of All India Gems and Jewellery Trade Federation, which has more than 40,000 members.
"...the exporter will be under pressure to export at any given price. If there is any export loss, the exporter will try recover it from domestic sales," Bombay Bullion Association ex-President Suresh Hundia said.
Exporters should benefit from the measures as supplies will now be guaranteed from any imports, said Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council, which has 5,000 members.
"This will be better than stopping imports (altogether), (but) this will reduce domestic supply," said Parekh.
The RBI and the government have taken measures to curb the rampant demand for gold, which makes India the world's biggest buyer and sent May imports to a record 162 tonnes as people took advantage of falling prices.
June imports fell back to 31.5 tonnes, but in a sign the authorities remain anxious ahead of traditional times for buying gold, the central bank said 20 pe rcent of imports must be used for overseas sales - giving exporters guaranteed supplies.
Last month, the RBI had ruled out any credit transactions for imports unless they were intended to make jewellery for export, as it looks to rein in a record current account deficit.
But on Monday, it said in its statement that "the extant instructions, as regards import of gold on consignment basis ... stand withdrawn."
India's current account deficit hit a record high 4.8 per cent of gross domestic product in the fiscal year that ended in March, fuelled in part by rising imports of gold, which are second only to oil in the country's shopping basket.
Gems and jewellery account for 16 per cent of total merchandise exports.
SOURCE: NDTV Profit
Importers will be required to keep 20 per cent of the consignment with customs bonded warehouses, the central bank added.
The RBI also included dore, or unrefined gold, for the first time in its restrictions, clamping down on a loophole in import duty which was hiked to 8 per cent but currently only on refined gold.
"This will make our life miserable, these are indirect ways of restrictions on imports (for domestic jewellers)," said Haresh Soni, chairman of All India Gems and Jewellery Trade Federation, which has more than 40,000 members.
"...the exporter will be under pressure to export at any given price. If there is any export loss, the exporter will try recover it from domestic sales," Bombay Bullion Association ex-President Suresh Hundia said.
Exporters should benefit from the measures as supplies will now be guaranteed from any imports, said Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council, which has 5,000 members.
"This will be better than stopping imports (altogether), (but) this will reduce domestic supply," said Parekh.
The RBI and the government have taken measures to curb the rampant demand for gold, which makes India the world's biggest buyer and sent May imports to a record 162 tonnes as people took advantage of falling prices.
June imports fell back to 31.5 tonnes, but in a sign the authorities remain anxious ahead of traditional times for buying gold, the central bank said 20 pe rcent of imports must be used for overseas sales - giving exporters guaranteed supplies.
Last month, the RBI had ruled out any credit transactions for imports unless they were intended to make jewellery for export, as it looks to rein in a record current account deficit.
But on Monday, it said in its statement that "the extant instructions, as regards import of gold on consignment basis ... stand withdrawn."
India's current account deficit hit a record high 4.8 per cent of gross domestic product in the fiscal year that ended in March, fuelled in part by rising imports of gold, which are second only to oil in the country's shopping basket.
Gems and jewellery account for 16 per cent of total merchandise exports.
SOURCE: NDTV Profit
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