New Delhi: The commerce ministry wants the finance ministry to reduce the import duty on gold in the forthcoming budget to boost exports and manufacturing of the gems and jewellery sector, according to reports.
The ministry in its budget proposals has suggested a significant reduction in the import duty on the yellow metal, a report said quoting sources.
In the budget or 2019-20, the government increased the import duty on the yellow metal to 12.5 per cent.
The gems and jewellery export industry has pitched for lowering the import duty to 4 per cent in the budget for 2020-21, which is scheduled to presented on February 1.
Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to this high duty.
Gems and jewellery exports declined by about 1.5 per cent to USD 20.5 billion in April-November this fiscal.
Gold imports in December declined sharply to 39 tonnes, from 152 tonnes in November. India’s gold imports, which have a bearing on the current account deficit (CAD), fell about 7 per cent to USD 20.57 billion during April-November period of the ongoing financial year, according to the commerce ministry data.
Imports of the yellow metal stood at USD 22.16 billion in the same period of 2018-19.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonne of gold annually.