According to one of the leading exporters, since MMTC is the only agency which supplies gold to all the exporters at international rates, the demand for it is always on the increase. Gold purchased from the Indian market rate works out to 15 per cent more than the international rate.

Earlier, in order to meet out the demand for gold from the Indian exporters the government had authorised some banks such as ABN Ambro, Corporation Bank, Indian Overseas Bank, Indian Bank, Allahabad Bank, Canara Bank, State Bank of India and some other agencies such as the State Trading corporation (STC) to undertake the responsibility of supplying gold to exporters.

But with no initiative seen on the part of the banks theproblem of equalising the demand and the supply still persists, said another exporter.

Banks are focussing more on domestic transactions as they are assured of immediate realisation of sales tax and the customs duty which can be realised from the exporter only after a certain period of time.

Since there are not many agencies to make available continuous supply of gold, the export orders get cancelled many times thereby affecting the overall export of the country.

The exporters are of the view that the government, in order to improve export, has to extend loans to them at rates on par with the international rates.

If the present rates ranging between 9 to 10 per cent persists gold jewellery exporters would not be in a position to quote competitive rates in the market.

Apart from this, in order to capture a wide market, the Indian exporters should offer 18 carat gold jewellery (75 per cent purity) which is widely accepted in the European countries. Since the handmade Indian jewellery cover only theethnic people abroad, it is necessary for the government to keep the exporters informed of the fashion in the market.

The facility of maintaining earners exchange foreign currency, wherein the exporter can maintain his account in foreign currency which is available for the other exporters other than the gold jewellery has to be put into practice as the exporters are experiencing the pinch of exchange rate while paying the MMTC.

According to the exporters, because of the release of 25 tonnes of gold by the Bank of England recently and the proposal of the International Monetary Fund to sell 311 tonnes and the idea of the Swiss Natonal Bank to float gold in the market has reduced the international price from $293.9/ troyounce to $ 261/ troyounce during the first week of July this year.

As per the statistical reports of the Gem and Jewellery export Promotion Council the exports of gold from India during the year 1998-99 worked out to $893 million when the actual target was $ 900 million. Whereas the diamondand the coloured gemstone exports have gone up to $ 5013 million (about $ 300 million more than the target) and to $ 263 million ($ 60 million more than the target) respectively. Exports from South during the year 1998-1999, have increased from around Rs 297 crore to around Rs 319 crore.