Sunday, February 02, 2014

Gold import likely to be less than 500 tonne in FY14: GJF
[Editor: After destroying the Construction, Real Estate, Banking & NBFC, Broking, Power, Automobile, Textile, etc, sectors, the government of India, has perhaps zeroed-in, on the wanton rout of Gems and Jewelry Sector too! There cannot be any economic logic to victimize a sector for years, because the government is either unable to control inflation or manage its currency (INR) well or its CAD. If the government of India, does not immediately relax the import norms of the Gold, then it is invariably going to face its negative side effect in the ballot box. Gone are the days,  when governments in India, used to have a control over media and its dangerous manipulations swept under the carpet. The point is that, when the livelihood of millions of workers associated with this sector is concerned, the FMOs' action is not only highly condemnable but also preposterous]
Mumbai, 2nd February, 2014: Gold imports are likely to be less than 500 tonne in the current financial year if the government does not relax the import restrictions, an industry body said. 

"The domestic jewellery sector is bleeding, with lack of stocks. If the government does not relax the import norms, including the 80:20 rule, the sector is going to witness a major setback," All India Gems & Jewellery Trade Federation (GJF) Chairman Haresh Soni told PTI here. 

With the current situation, jewellery manufacturing is expected to see a decline of about 40 per cent this financial year, ending March 31, compared to last year, rendering many artisans jobless, he said. 

The total sales are likely to decline by 25-30 per cent this fiscal compared to last year as the market did not have enough variety to woo the customers, he said. 

The Centre tightened norms to curb gold imports which had contributed hugely to the bloating of the Current Account Deficit - difference between outgo and inflow of the forex. 

Soni said that without policy relaxation the gold import this year may be even less than 500 tonne. In 2012-13, gold imports stood at 845 tonne. 

The jewellers, he said, are ready to help the government in keeping the gold import at USD 30 billion in value terms. 

"However, this USD 30 billion worth gold imported into the country should be done smoothly, which will help the sector," he said adding that the restrictions are not only giving rise to smuggling but also to monopoly. 

The 80:20 rule mandates importers to channel at least 20 per cent of the imported gold to jewellery exports. Jewellers are also asked to give proof of the export realisation of the first consignment before seeking delivery of the third tranche from importers. 

Besides, the government also increased import duty on gold to 10 per cent and banned inward shipments of gold coins and medallions. 

Soni said these restrictions are also leading to soaring premiums, as high as USD 120-130 per 10 grams from the earlier USD 1.5-2. "The gold price gap between the international and domestic market resulted in diverting the NRI business flow to the Middle East countries," Soni said. 

In FY13, about 15-20 per cent of business flow was from Non Resident Indians, he said. 

Soni further said the GJF is trying to talk to the government to for immediate measures in order to save the sector, and if it doesn't do anything the industry will resort to a nation-wide agitation. 

Courtesy: The Economic Times