India to reconsider gold import restrictions by March end

January 27, 2014 08:15 AM

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The Indian finance ministry announced yesterday that they will be reconsidering the import restrictions imposed on gold by March end. The Finance Minister of India, Mr. P. Chidambaram on Monday informed that the government will be taking actions regarding the current gold import restrictions soon. He further exerted that reviewing the restrictions would be done only when the government becomes successful in curbing the Current Account Deficit (CAD).

The Indian Finance minister while addressing the tax officials on the International Customs Day on Jan. 26 said that the gold import restrictions would be reduced when they are capable of bringing down the CAD to $50 billion, which is presently $88.2 billion for the year 2013.

In order to curb gold import and to reduce CAD, RBI had increased customs duty on gold three times last year, bringing it to the current 10%. Various regulatory measures were also carried out by the Central Bank of India to bring down import. The scarcity of gold together with its hiked price and increased demand opened route for smuggling recently. Congress President Sonia Gandhi had last week called for easing the current gold import restrictions as requested by the All India Gems and Jewelry Trade Federation. Finance minister had however rejected the call saying that he had no plans in rolling back the restrictions.

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