Mumbai: India’s biggest jewellery retailer Titan Co hopes to start exports in the next fiscal year to perk up sales that have been dampened by the country’s strict curbs on gold imports, a senior company official said on Wednesday.
Struggling with a ballooning trade deficit, India last year imposed a record high duty of 10 percent on overseas purchases of gold, the second-biggest expense in its import bill, and introduced a rule tying import quantities to export levels.
Titan, which has a direct gold import licence but no export business, has been caught on the wrong side of the so-called 80/20 rule that means a fifth of all imports must be exported.
“The 80/20 rule has triggered this change of strategy,” C.K. Venkataraman, chief executive of Titan’s jewellery division,said, referring to the firm's export plans.
“If there are more restrictions, or for example if the government makes it 70/30, if we are exporting it will be easy. It’s a pre-emptive step,” said Mr Venkataraman, who does not expect the government to remove gold import curbs anytime soon.
Finance minister P. Chidambaram has indicated that curbs can be revisited only after the final current account deficit numbers, which are expected to be published in early June.
Titan is in discussions with potential partners in Singapore and Dubai, and hopes to begin exports starting April, Mr Venkataraman said, but declined to give more details.
The company currently gets more than 75 percent of its revenue from the jewellery segment that caters solely to the domestic market valued at $30 billion.
Mr Venkataraman expects diamond jewellery sales in the quarter ending March to grow by 15 to 20 per cent from a year ago in the domestic market, but said the growth in gold jewellery sales will be sluggish.