In its other move to balance the soaring trade and current account deficits, the government has hiked the import duty on gold and silver jewellery to 15 percent. A finance ministry statement said that 'To protect the interests of small artisans, the customs duty on articles of jewellery and of goldsmiths’ or silversmiths’ wares and parts thereof is being increased from 10 percent to 15 percent.”
The move was mainly to plug the loophole in government's earlier step, after the traders had started exploring the possibility of importing jewellery, as it was hassle-free and does not attract the Reserve Bank of India’s 80:20 norms. The finance ministry arguing for its latest move has said that jewellery making was a labour-intensive industry, with millions of artisans dependent on this sector for their livelihood and in the absence of any duty, differential between articles of jewellery and primary metal, there was an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India.
Besides providing a level playing field for domestic jewellery makers, the hike in jewellery duty seeks to contain imports of gold ornaments. The government has increased the import duty on the gold from around 1 percent at the start of 2012 to discourage imports and manage the current account deficit, which was estimated at a record 4.8 percent of GDP in 2012-13. Gold imports in value terms fell to $650 million in August, from $2.2 billion in July.
The move was mainly to plug the loophole in government's earlier step, after the traders had started exploring the possibility of importing jewellery, as it was hassle-free and does not attract the Reserve Bank of India’s 80:20 norms. The finance ministry arguing for its latest move has said that jewellery making was a labour-intensive industry, with millions of artisans dependent on this sector for their livelihood and in the absence of any duty, differential between articles of jewellery and primary metal, there was an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India.
Besides providing a level playing field for domestic jewellery makers, the hike in jewellery duty seeks to contain imports of gold ornaments. The government has increased the import duty on the gold from around 1 percent at the start of 2012 to discourage imports and manage the current account deficit, which was estimated at a record 4.8 percent of GDP in 2012-13. Gold imports in value terms fell to $650 million in August, from $2.2 billion in July.
No comments:
Post a Comment