India vanishes gold import rule in surprise move - Business

India vanishes gold import rule in surprise move

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India’s gold import rule vanished

29 November 2014 Mumbai: World’s largest gold importer and one of the emerging market for luxury goods and commodities, Indian government has vanishes its gold import rule previously imposed in a surprise move.
According to a International news report, India has scrapped a rule mandating traders to export 20 per cent of all gold imported into the country, in a surprise move that could cut smuggling and raise legal shipments into the country.

Along with a record duty of 10 per cent, India introduced the so-called 80:20 import rule tying imports to exports of jewellery last year to bring down inbound shipments and narrow the current account deficit that had hit a record.

“It has been decided by the Government of India to withdraw the 20:80 scheme and restrictions placed on import of gold,” the Reserve Bank of India said on Friday.

Only days ago there were talks between officials of the Mumbai-based central bank and the finance ministry in New Delhi to bring back curbs on some trading houses following a surge in imports over the past few months.
Traders said before the decision on Friday that India’s gold imports could climb to around 100 tonnes for a third straight month in November as dealers bought heavily on fears of curbs on overseas purchases, especially as the wedding season picks up.

Source: Reuters