Author: Paul Ploumis03 Mar 2014 Last updated at 23:47:20 GMT
MUMBAI (Scrap Monster) : Choked by the stringent gold import duty that has been terribly affecting the business of gold jewelers in India, a nationwide shutdown was announced yesterday to axe the Govt. imposed import duty. While addressing the media by phone, Mr. Kumar Jain, the spokesman for the Bombay Bullion Association announced their decision to begin their protest against the hiked gold import duty on March 10 by suspending operations across India.
Indian jewelers through the GJEPC and other jewelry associations had made several requests earlier to ease the currently hiked gold import duty from 10 % to the original 2 %. They had also made a written request to the Congress Chairperson, Sonia Gandhi who had conveyed the necessity to the Indian Finance Minister, P. Chidambaram. Though the finance ministry had assured to consider revising the gold import duty by March-end, the issue was not mentioned in last month’s interim budget. Jewelers exerted the need for easing the rule, now that the current account deficit (CAD) of the country has been reduced to controllable levels.
Along with reducing the current 10 % gold import duty to 2 %, the association representing around thousand bullion dealers and jewelers have also informed their demand to ease the re-importing rules and credit norms. In 2013, India had hiked the gold import duty thrice citing the need for reducing the ballooning CAD. This in turn declined the overseas gold purchase drastically over the year, creating shortage of stocks. The stock crunch fueled the increase of domestic premiums in December 2013, touching the highest at $ 160 an ounce over London cash price. In order to cope up with the stock shortage and to fulfill the demand of their customers, Indian jewelers were forced to purchase finished jewelries from foreign countries as per the report of World Gold Council.
The Nationwide shutdown will adversely affect the gold demand of customers, at the time when the festival and wedding seasons are at full swing.