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P. Chidambaram: Gold import curbs to be reassessed after final CAD figures

Mar 06 2014, 19:10 IST
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P. Chidambaram: P. Chidambaram: "We will revisit the import duty on gold only after the CAD figures become clear for the end of the year". (Reuters)
SummaryThe Reserve Bank of India linked imports of the precious metal to exports amid a widening CAD and depreciation of the rupee.

Faced with intense pressure to relax gold import curbs, the government today said it will review the decision after getting final figures of the current account deficit (CAD).

"We will revisit the import duty on gold only after the CAD figures become clear for the end of the year. Let's see what the CAD figures are," Finance Minister P Chidambaram told reporters here.

The government had imposed restrictions on imports of the yellow metal to contain the CAD, which touched a record high of USD 88.2 billion in 2012-13. The CAD in the current financial year is expected to narrow to USD 50 billion.

Gold imports, which peaked at 162 tonnes in May, came down to 19.3 tonnes in November after the government hiked import duty thrice in 2013, taking it to 10 per cent.

Besides, the Reserve Bank of India linked imports of the precious metal to exports amid a widening CAD and depreciation of the rupee.

With the growing clamour for a cut in customs duty on gold, Congress President Sonia Gandhi had written to the Ministry of Commerce and Industry to take appropriate action on demands of gems and jewellery exporters to reduce the levy and relax the rule linking imports of the metal with exports.

Commerce and Industry Minister Anand Sharma yesterday too made a case for easing curbs on gold imports, saying over-regulation was encouraging smuggling of the yellow metal.

"I have been of the consistent view that we have to have a balance. Over-regulation leads to another problem...and that is smuggling. Therefore, some easing is essential," Sharma had said.

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