KOLKATA: Non-resident Indians who usually buy gold in India during their visits and stash the yellow metal away in lockers have become cautious after the recent government directive on accumulation of the precious metal.
Jewellers said purchases by NRIs have fallen 30-40% after the government said jewellery or ornaments bought with explained sources of income will not be taxed, but anything bought with unaccounted money will come under the scanner. Non-resident Indians usually come calling during this time of the year to attend family weddings.
“NRIs prefer to buy gold in cash. After arriving, they get their foreign currency exchanged in rupee to buy gold. But that’s not happening this time as there’s a cash shortage due to demonetisation and banks are focussing on cash operations. Also, NRIs are a bit unclear about the measures the government is taking to clean up the economy,” said Rajiv Popley, director of Mumbai-based jewellery firm Popley and Sons.
Most large pieces of gold that NRIs buy during their visits are treated as assets and tucked away in lockers here.
Gold trade analysts, however, pointed out that NRIs needn’t worry as the government has clarified there would be no seizure of gold jewellery or ornaments to the extent of 500 gm per married woman, 250 gm per unmarried woman, and 100 gm per male member of a family during income-tax search operations. The government has also said there will be no tax on ancestral jewellery and those bought through disclosed or agricultural income.
Joy Alukkas, chairman of the eponymous jewellery retail chain, said there has been a 40% decline in business. “This may include NRI business too.”
NRIs visiting India do not prefer to bring in large pieces of gold although the rules permit them to import bars, coins and ornaments up to 1kg. The only pre-condition is that they should have stayed abroad for six months or more. This import is, however, subject to duty.
Bacchraj Bamalwa, director of the All India Gems and Jewellery Trade Federation, said NRIs prefer Indian jewellery because of the design and craftsmanship.
Source: economictimes.indiatimes.com/