India May Take More Steps to Temper Gold Imports

June 18, 2013 at 11:03

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India the world’s biggest consumer of gold, could implement more measures to curb imports, a top economic official said as the country seeks to narrow a record current-account deficit and check the currency’s drop.

“We are not at the end of our wits as far as gold imports are concerned,” Economic Affairs Secretary Arvind Mayaram said in an interview yesterday. “If required, there are other measures that can be taken and they will be considered at the appropriate time.”

India this month increased a tax on gold imports as it tries to curb demand for the metal that’s contributed to the current-account gap and hurt the currency. The rupee dropped the most in a week yesterday as the central bank left borrowing costs unchanged, after falling in each of the last six weeks and touching a record low of 58.9850 per dollar on June 11.

The Finance Ministry is finalizing measures to attract foreign investments, including liberalizing foreign direct investment caps in various industries, Mayaram said. The slide in the rupee value is temporary, he said.

“We need to continue to push for long-term capital inflows and therefore the FDI policy has to undergo a revamp,” Mayaram said. “We need to move in this direction quickly and it needs to be a paradigm shift in how we look at FDI.”