ax and regulatory restrictions on gold imports have adversely affected exports of jewellery and other finished products, rendering thousands jobless in the labour-intensive sector. The recent decision by the Reserve Bank Of India (RBI) to allow more entities to import gold has somewhat eased supplies but it’s not enough to script a rebound in exports of finished gold products in a big way unless the government lifts all restrictions including the 10% customs duty, according to jewellers.
The import duty coupled with the RBI’s 80:20 rule have driven up raw material prices and dented India’s competitiveness in exports of jewellery, bars, coins and medallions. The RBI last year mandated that at least one-fifth of imported gold must be kept aside for re-exports, and no fresh tranche of imports by an agency would be allowed until 20% of the previous imported volume is exported after value addition, causing premiums to rise by up to 12% of the price overseas.
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