Restrictions on gold imports to be reviewed by March-end: Finance Minister

NEW DELHI: The government is unlikely to lift import restrictions on gold before the end of this financial year, finance minister P Chidambaram indicated on Monday when he said the tight curbs will be reviewed only after March.

The finance minister’s statement comes amid hectic lobbying by gold traders and jewellers for lowering of the import barriers and a roll back of the high import duty following dramatic improvement in the country’s current account deficit.

Industry representatives had even written to the United Progressive Alliance chairperson Sonia Gandhi, prompting her to ask the commerce ministry to look into their demand.

“I am confident that by the end of this year we will be able to revisit some of the restrictions on gold import, but we will do so only when we are absolutely sure that we have a firm grip on the current account deficit,” Chidambaram said addressing tax officials in Delhi on the occasion of Customs Day.

The government had imposed a series of curbs on gold imports in 2013, including raising Customs duty to 10 per cent from 2 per cent in three tranches, to rein in the country’s ballooning current account deficit, which touched an all-time high of 4.8 per cent of GDP in 2012-13. Gold is the country’s second-biggest import.

The Reserve Bank of India also imposed curbs on gold imports such as the 80:20 rule, which mandated export of 20 per cent of gold imported.

The curbs forced imports down to 19.3 tonnes in November from 162 tonnes in May, but part of the import shifted to unofficial channels. Finance secretary Sumit Bose said the imports were a little higher in December.

Gold and silver imports fell to $27.3 billion in April-December from $39.2 billion during the year-ago period. The current account deficit in the first half of the fiscal was down to $26.9 bil-lion from $37.9 billion in the yearago period. It is projected to decline to $45 billion in the current fiscal from $88 billion last year.

“I know gold smuggling has increased... But the restrictions on gold import were absolutely necessary because it is these restrictions which have brought down gold import, which in April and May had crossed 300 tonnes,” Chidambaram said, pegging gold smuggling at 1.3 tonnes a month.