Jewellers want reduction in NRI gold import.

NAGPUR: Jewellers, who are lobbying hard for a roll back in central excise duty on unbranded ornaments, are also pointing fingers at NRI travellers, terming them the likely agent for money laundering through yellow metal.

The traders hosted a party for members of parliament on Thursday in Delhi to press for their demand to withdraw central excise. They also lobbied for a drastic cut in quantum of custom-free import of gold by NRIs.

At present an NRI, after six months of stay, can return with 10 kgs of gold or 100 kgs of silver. Jewellers want this reduced to 1 kg of gold.

The function hosted in Hotel Taj Palace, Delhi, had 79 MPs turning up as against close to 150 expected. Prior to this, jewellers called on BJP national president Nitin Gadkari whose support they are claiming. The issue of a cut in the NRI import quota came after the MPs expressed concern over gold becoming a means of stashing unaccounted wealth and money laundering, saying that covering the trade under excise laws could prevent the practice. On this, the jewellers turned the blame on NRI travellers saying their gold import had emerged as major money laundering tool. The cut in quota has also been one of the demands in the budget memorandum issued by All India Gems and Jewellery Association (AIGJF).

Nitin Khandelwal, a director in AIGJF, said that gold purchased by NRIs does not reach the jewellers who normally import the commodity through banking channels. This begs the question as to where the gold finally lands up, he added.

Acccording to Ashok Minawala, the former president of AIGF the prices were much lower when the relaxation on imports by NRIs was introduced. "However, today 10 kgs gold costs almost Rs 3 crore. An ordinary NRI does not have capacity to purchase it. This raises suspicion over those bringing gold," he said. Minawala said the government, which is keen on reducing balance of payments gap, may actually cut the quota to around 1 kg.

Khandelwal added that a large number of BJP MPs attended the function as the jewellers lobby is banking upon the opposition to take up their cause. The jewellers had called off their indefinite strike following a meeting with the union finance minister Pranab Mukherjee. The trade is banking on his verbal assurance to roll back the proposal.

Source : timesofindia.indiatimes.com