Gold import curbs eased; 80:20 rule scrapped
01/12/2014 00:20
In a surprise move, the government on Friday eased restrictions on bullion imports while scrapping a rule that required traders to export 20 per cent of all gold imported into India, the world’s second biggest gold consumer. The move to scrap the controversial 80:20 rule may reduce smuggling of gold into India, and prevent alleged misuse by many companies while boosting legal shipments, experts said. The rule was put in place by the erstwhile UPA government last year in a bid to discourage gold imports to rein in a record high current account deficit (CAD). “It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold,” the Reserve Bank of India (RBI) said. However, the central bank did not give any reason for scrapping the rule. The easing of gold import curbs comes amidst rising expectations that the government was poised to take fresh measures to reduce imports of the yellow metal which have surged in recent months, threatening to widen the country’s trade and current account shortfalls. India’s imports of gold rose to 150 tonnes in October from 24 tonnes in the same month a year ago while in volume terms, they shot up to USD 4.2 billion from USD 1.1 billion
01/12/2014 00:20
In a surprise move, the government on Friday eased restrictions on bullion imports while scrapping a rule that required traders to export 20 per cent of all gold imported into India, the world’s second biggest gold consumer. The move to scrap the controversial 80:20 rule may reduce smuggling of gold into India, and prevent alleged misuse by many companies while boosting legal shipments, experts said. The rule was put in place by the erstwhile UPA government last year in a bid to discourage gold imports to rein in a record high current account deficit (CAD). “It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold,” the Reserve Bank of India (RBI) said. However, the central bank did not give any reason for scrapping the rule. The easing of gold import curbs comes amidst rising expectations that the government was poised to take fresh measures to reduce imports of the yellow metal which have surged in recent months, threatening to widen the country’s trade and current account shortfalls. India’s imports of gold rose to 150 tonnes in October from 24 tonnes in the same month a year ago while in volume terms, they shot up to USD 4.2 billion from USD 1.1 billion
