Chennai: Government does not seem to be sure about CAD remaining under control. It kept away from making any changes in the import duty structure on gold as was promised by the previous government. However, diamond exporters got some relief in the form duty cuts.
The gems and jewellery industry has been seeking relaxation in the 80/20 rule for gold imports and reduction of duty from 10 per cent. The industry had been expecting that once the current account deficit comes with controllable levels, the government will rethink of the restrictions and duties.
“CAD came down from 0.9 per cent to 0.2 per cent. With the CAD coming under control, there was lot of expectations from the newly formed BJP led government. However current budget has not seen any change in import duty, hence there is no respite for traders and the consumers,” said Sachin Kothari, director, BullionIndia.in.
“Indian gems and jewellery Industry is extr-emely disappointed with the Union government budget proposals as the finance ministry did not consider their plea of reducing the import duty component on gold and also abolish the stringent 80:20 norms,’ said Haresh Soni, chairman, All India Gems and Jewellery Trade Federation.
“The union finance minister has ignored the plight of the trade despite several representation and meetings by the federation with the ministry highlighting the severe hardship faced by the industry due to restrictive policy measures of the government in last financial year”, he said.
The economic survey too had acknowledged that the CAD had a sharp fall with the decline in gold imports. The export-import deficit bridged in by 27.8 per cent from $190.3 billion during 2012-13 to $137.5 billion. The value of gold and silver imports fell by 40.1 per cent to $33.4 billion in 2013-14, the survey stated.
