NEW DELHI (Scrap Monster): The Gems and Jewellery Export Promotion Council (GJEPC) has urged the Indian government to reduce the import duty on gold and silver to 2% from 10%. The jewellery exports body also requested to scrap the existing 80:20 scheme imposed by the previous government to curb rising Current Account Deficit (CAD). The proposals were submitted to the country’s Finance Ministry during a pre-Budget presentation.
According to Vipul Shah, Chairman, GJEPC, a relook at the gold import policy by reducing duty may create a level-playing field for Indian jewellers. The prevailing higher gold and silver import duty has led to higher transaction costs to jewellery exports from the country.
GJEPC stated that the current high import duty of 10% makes the operations of smuggling economically viable. The reduction of import duty to 2% will turn gold smuggling into non-productive affair and hence will prevent illegal imports into the country. Further, GJEPC also noted that it is the most appropriate time to scrap the controversial 80:20 scheme, as the CAD is very well within the required limits.
The sharp decline in import of raw gold and silver led to 9% decline in gems and jewellery exports during last fiscal. The exports had totaled $39.5 billion during last fiscal. The imports of gold and silver fell by nearly 40% to $33.46 billion during 2013-’14.