In an interaction with gold committee members of the Associated Chambers of Commerce and Industry of India (Assocham) on Monday, commerce secretary SN Menon indicated that the ministry is preparing to announce a new gold policy, separate from the governments foreign trade policy. .
The meeting between the Assocham members and the commerce secretary deliberated on improving the scope of measures to facilitate banks undertaking hedging in the gold futures market. It also discussed the implementation of gold-linked saving schemes, mutual fund investments in gold and putting in place appropriate customs and foreign trade measures to facilitate manufacturing and trading in gold.
The Assocham delegation, led by the chambers alternate president Anil K Agarwal, also urged the government to make use of the retail bullion reserves of the country and sought to widen the existing list of canalised bullion importers. The delegation contended that gold and silver imports through select canalised agents had outlived their utility. "Remove the canalisation of bullion imports as it will reduce transaction cost and make procedures simple. Imports of gold and silver are purely market driven," said Agarwal.
The countrys first liberalised bullion policy was announced in 1997 and it permitted only canalised imports of gold and silver through certain nominated agencies and banks. These agencies were free to import bullion without any quantity restrictions, while the actual importers were not.
The Assocham delegation has also asked the commerce ministry to set up Free Trade Zones (FTZs) for bullion in India to develop the market for the precious metals. "The FTZs could be set up with the participation of the Reserve Bank of India (RBI), banks, refiners, fabricators, importers and exporters of bullion," the chamber suggested.
India currently produces roughly five tonnes of gold and silver annually. The chamber delegation has also favoured allowing foreign companies in gold and silver minning in India.