Mumbai, Feb. 28: It was celebration time for gems and jeweller exporters in the country as the finance minister Jaswant Singh announced a slew of initiatives that included lower customs duties on gold and gem stones in his maiden Budget. The lower duties are also expected to fuel exports of gems and jewellery from the country and curb gold smuggling.
India is the world’s largest importer of gold and the finance minister announced a cut in customs duties to a historic low level.
Yet, bullion analysts pointed out that this would not make any significant impact on gold prices as it would continue to depend on global movements. They however, felt that smuggling of the yellow metal would drastically come down as it would now be not lucrative.
Singh proposed to lower the customs duty on imported gold to Rs 100 per 10 grams from the present level of Rs 250 per 10 grams, but only when it is brought in the form of serially numbered bars, or in the form of gold coins, not as ‘tola’ bars. Singh was optimistic that this will become the first step in enable India to shortly emerge as the gold-trading capital of the world.
He also proposed to reduce the customs duty on rough, coloured gem stones from 5 per cent, and on semi-processed, half-cut or broken diamonds from 15 per cent to nil. Customs duty on cut and polished diamonds and gem stones will also be reduced from the present 15 per cent to 5 per cent.
A cheerful Sanjay Kothari, chairman, Gem & Jewellery Export Promotion Council (GJEPC), while applauding the finance ministry and the ministry of commerce for the reduction of import duty on the cut & polished diamonds and cut and polished coloured gemstones from 15 per cent to 5 per cent and zero duty on rough coloured gemstone, said, “The government has rightly appreciated the need of the industry. This favourable move will further boost gem & jewellery export.”
He added that the council had expressed the industry’s need to permit import of semi processed diamonds, half cut diamonds, broken diamonds in any form on the same lines of import of rough diamonds.