The commerce ministry on Friday clarified that at least 20 per cent of imported gold be used for re-exports,paving way for the smooth purchases of the precious metal from overseas after a gap of almost two months as well as its outbound shipment.
The issue was sorted out in a meeting between commerce secretary SR Rao and industry representatives,gems and jewellery exports promotion council and finance ministry officials,including those from customs. Gold imports by India,the worlds largest consumer,dried up after the RBI said on July 22 that a fifth of purchases would have to be turned around for export in a bid to trim a worsening current account deficit. The RBI norm left many confused,leading to imports being held up at customs. The confusion was mainly about the 80-20 norm. Many people misread this. This means at least 20 per cent of imported gold must be exported. The rule that was interpreted as limiting the amount available for exports to just a fifth of total shipments, said a government official. Gold and silver imports in May stood at a staggering $8.4 billion but declined to $2.45 billion in June. The country exported gold products worth $18.28 billion in the last fiscal year,compared with its gold imports of $53.82 billion.
However,the share of the countrys gold exports in its imports of the precious metal has dropped to roughly 34 per cent in the last fiscal year through March from 41.6 per cent five years before. Although gold imports were going on but there was confusion on the implementation of the RBIs scheme. The clarification will help about 1 tonne of gold stuck at airports to move immediately. FE