India Rules Out Gold Import Ban

July 18, 2013 at 08:46


Ruling out complete ban on gold import, Finance Minister P Chidambaram appealed to the people to moderate their demand for the precious metal which is costing the nation USD 50 billion in foreign exchange.

“We cannot completely ban import of gold. There is a long time attachment to gold in this country. I am requesting… can we for sometime moderate the demand for gold? “Can we reduce our appetite for gold? If you are buying, say 20 grams, can you buy 10 grams,” he said while addressing a press conference here.

Attributing the high Current Account Deficit (CAD) to mainly gold import, Chidambaram said the inward shipments of the precious metal resulted in outgo of USD 50 billion.

“We have a CAD. USD 50 billion is the cost of gold. I am appealing to the people of India to moderate demand for gold,” the Minister said.

Gold imports in June are estimated to have fallen to around 31 tonnes, down from 162 tonnes in May and 141 tonnes in April.

To curb demand, the government hiked the import duty on gold thrice in a year and raised it recently by 2 per cent, to 8 per cent. Besides, RBI too, has put restrictions on banks on importing gold.

India is the largest importer of gold and is mainly utilised to meet demand of the jewellery industry. The imports stood at around 830 tonnes in 2012-13.

In value terms, gold and silver imports are estimated to have declined substantially to USD 2.45 billion in June, from USD 8.39 billion in May.