Easing the restrictions on gold imports, the Reserve Bank of India on Friday scrapped the 80:20 scheme with immediate effect. Under the 80:20 norms, 20% of the imported gold had to be mandatorily exported before bringing in new lot.
Faced with rising gold imports and a worsening current account deficit in 2013, the government had clamped down on imports by introducing this scheme. This was in addition to hiking the import duty to 10%. These measures came on the basis of recommendations of a working group that the RBI had formed to address the gold import problem in 2013.
These restrictions were eased slightly by the RBI in May this year when the central bank allowed star and premier export houses to import gold. Initially only public sector firms and banks were allowed to import gold.
Gold imports jumped 280% to $4.17 billion in October, according to the trade data. The country imported 95,673 kg of gold in September, the highest level in the first six months of this financial year.
In August, the imports stood at 50,213 kg. Imports of the precious metal in April, May, June and July were 43,207 kg, 52,612 kg, 77,681 kg and 45,269 kg respectively.