This, as officials say the rule is inhibiting imports
The government and the RBI are considering easing the 80:20 rule that requires importers to supply at least 20% of their imports to exporters.
Officials said the rule is inhibiting imports and traders have made a presentation to the government to relax the condition as it is troublesome for them to show proof of export for every lot of imports.
"The government is considering a proposal whether importers can be allowed to make the declaration on an annual basis," said a finance ministry official.
On July 22, the RBI had said that a fifth of the gold purchases by importers in every lot would have to be exclusively made available for exporters. It said only 80% of the imports could be used for domestic purposes, and that too only for entities engaged in jewellery business, bullion dealers and banks.
If a nominated agency imports say 100 kg of gold, it has to be routed through custom bonded warehouses only. If considered necessary, the lot can be procured through two invoices - one for exporters (20%) and the other one for domestic users (80%). Next lot of imports is permitted only after the quantity earmarked for exporter clients is released.
The quantum of gold permitted to be imported in the third lot is restricted to five times the quantum for which proof of export is submitted. For import of gold in the subsequent lots, the cycle is repeated following the 20/80 principle.
Traders and jewellers argued that this would put them under pressure to export at any given price and as one would try to recover the loss on domestic sales this would make gold costlier.
Due to 10% customs duty and import curbs, gold imports are expected to be below 750 tonne this year;a drop of 11% from last year.
The government and the RBI are considering easing the 80:20 rule that requires importers to supply at least 20% of their imports to exporters.
Officials said the rule is inhibiting imports and traders have made a presentation to the government to relax the condition as it is troublesome for them to show proof of export for every lot of imports.
"The government is considering a proposal whether importers can be allowed to make the declaration on an annual basis," said a finance ministry official.
On July 22, the RBI had said that a fifth of the gold purchases by importers in every lot would have to be exclusively made available for exporters. It said only 80% of the imports could be used for domestic purposes, and that too only for entities engaged in jewellery business, bullion dealers and banks.
If a nominated agency imports say 100 kg of gold, it has to be routed through custom bonded warehouses only. If considered necessary, the lot can be procured through two invoices - one for exporters (20%) and the other one for domestic users (80%). Next lot of imports is permitted only after the quantity earmarked for exporter clients is released.
The quantum of gold permitted to be imported in the third lot is restricted to five times the quantum for which proof of export is submitted. For import of gold in the subsequent lots, the cycle is repeated following the 20/80 principle.
Traders and jewellers argued that this would put them under pressure to export at any given price and as one would try to recover the loss on domestic sales this would make gold costlier.
Due to 10% customs duty and import curbs, gold imports are expected to be below 750 tonne this year;a drop of 11% from last year.
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