Commerce minister wants gold import curbs eased.

NEW DELHI: India's trade minister said on Tuesday he had raised the issue of easing some curbs on gold imports with the finance ministry, as they were encouraging smuggling and hurting the gems and jewellery industry, an important export sector.

The government imposed the restriction on imports last year, in order to narrow a worrying high current account deficit, and any relaxation of the curbs could revive Indian demand and support global prices.

"We have to have a balance. Over-regulation, too much of tariffs, lead to another problem ... of smuggling," commerce minister Anand Sharma told a news conference.

"We have to ensure adequate availability of gold for the gems and jewellery industry, which is a very important sector for our exports."

Finance minister P Chidambaram said last month he would cap the current account deficit below $45 billion as against $88 billion last year and he is expected to review the gold curbs by mid-March ahead of an election expected by May.

Last year, the government raised import duty on gold to a record 10 percent and tied gold consumption to exports of gold jewellery to bolster India's external finances, which came under strain from a decision to scale back US monetary stimulus.

Jewellery exports have suffered a drop of more than 50 percent since the start of the year.

Despite the rule ensuring the supply of gold to exporters, jewellery makers have suffered delays receiving imported gold because of the lengthy customs clearances.

Source : timesofindia.indiatimes.com