|Finance minister P. Chidambaram with minister of state J.D. Seelam (left) and finance secretary Sumit Bose (centre) in New Delhi on Monday. (PTI)
New Delhi, Jan. 27: The curbs on gold imports may be eased by the end of this fiscal if the government is able to put a lid on the ballooning current account deficit, finance minister P. Chidambaram said today.
Earlier this month, UPA chairperson Sonia Gandhi forwarded a letter to the commerce ministry from the All India Gems and Jewellery Association seeking a tariff cut.
“I am confident that by the end of this year we will be able to revisit some of the restrictions on gold imports but we will do so only when we are absolutely sure that we have a firm grip on the current account deficit,” Chidambaram said at an event here.
The government had raised the import duty on gold to 10 per cent in 2013 from 4 per cent to rein in the deficit.
Gold supplies also dried up after the Reserve Bank of India mandated that importers should keep aside 20 per cent of any imported gold for re-export as jewellery.
India’s current account deficit (CAD) had mounted to a record $88.2 billion, or 4.8 per cent of the gross domestic product, in 2012-13, with gold imports contributing to the surge.
Gold is the second major item in the import bill after crude oil.
Chidambaram said restraining gold imports did not figure in the long-term strategy to check CAD.
“The long-term goal is to increase exports. We have to earn as many dollars as we need through exports to pay for imports,” he said.
For the April-December period, exports stood at $230.3 billion and imports at $340.3 billion, with the trade deficit at $110 billion.