The government on Wednesday announced ‘curbs’ on the import of some gold jewelery and other items. This step will help in curbing the import of some non-essential items.
Now the importer will have to obtain license permission from the government to import these gold products. However, the Directorate General of Foreign Trade (DGFT) has clarified that these restrictions will not apply to imports under the Free Trade Agreement (FTA) between India and the United Arab Emirates (UAE).
The DGFT said in a notification that the policy on import of these products has been revised from ‘free’ to ‘restricted’ with immediate effect. India is the largest importer of gold. The demand of the country’s jewelery industry is met by the import of gold. In terms of quantity, India imports 800-900 tonnes of gold annually.
Import of precious gems decreased
Import of pearls and precious gems decreased by 25.36 percent to $4 billion during April-May period of the current financial year. During this period, the import of gold has also decreased by 40 percent to $ 4.7 billion. It was mainly imported from countries like UAE, Indonesia and USA.
Merchandise imports also decreased
During April-May in the current financial year, total merchandise imports decreased by 10.24 percent to US $ 107 billion. The merchandise trade deficit for April-May 2023 stood at US$ 37.26 billion as against US$ 40.48 billion during April-May 2022.
Import duty on gold increased
Due to global economic uncertainties, India’s gold import has decreased by 24.15 percent to $ 35 billion in 2022-23. In the last financial year i.e. 2021-22, the import of yellow metal was $ 46.2 billion. During the last financial year 2022-23, the export of gems and jewelery decreased by three percent to about $ 38 billion. To curb the current account deficit (CAD), the government last year raised the import duty on gold from 10.75 per cent to 15 per cent.
