The government on Friday eased import norms for gold by scrapping the rule that mandated traders to export 20% of all yellow metal imported into the country, a move that could cut smuggling, enhance local supplies and temper down prices.
The “80:20 import rule” tying imports to exports was introduced last year to discourage inward gold shipments, stem dollar outflow, narrow down the current account deficit and help the rupee that had hit record lows.
“It is good news for the industry and we will now see a drop in premium charges,” said All India Gems and Jewellery Federation chairman Haresh Soni. “If premiums come down, prices too soften.”
Gold imports had surged in September and October by 450% and 280%, respectively, prompted by festival-driven demand and speculation that it might get costlier if the government imposed import curbs.
Soni said the import curbs had restricted basic raw material available for the gems and jewellery sector.