New Delhi: Gold jewellery prices are set to go up with RBI mandating 20% of every lot of imported gold to be set aside for the purpose of exports. With the move likely to generate a shortage of the yellow metal for consumers, jewellers and retailers said this will push up domestic prices as traders will be compelled to export even at low prices to meet the norms.
"The government can discourage consumption of gold only by increasing the price of the metal. This is another step in that direction. The increased local premium will be factored in the end price, making it costlier for the consumer," said Jayant Manglik, president, retail distribution, Religare Securities. For retailers, the move has spelt greater discomfort as it will require them to set aside one fifth of every import shipment for exports. According to the policy, 20% of the imported quantity of gold will be retained in customs-bonded warehouses. Fresh imports of gold will be permitted only after 75% of the retained gold is exported.
"It is a complicated policy. It is not possible for us to ensure a specified amount of exports with every shipment of gold imported. It will make it very cumbersome for retailers. We would not mind paying a penalty, but this is not a welcome move for the manufacturing industry," said Mehul Choksi, CMD, Gitanjali.
According to industry estimates, as against an average of 900 tonnes of consumption of gold in the country annually, exports stand at 60-65 tonnes per year. REINING IN DEMAND
According to the RBI policy, 20% of the imported quantity of gold will be retained in the customs bonded warehouses. Fresh imports of gold will be permitted only after 75% of retained gold is exported
The move may lead to shortage of the yellow metal for consumers
at home, leading to hike in prices
While the RBI move may discourage the consumption of gold to some extent, experts believe it will not be possible to push exports significantly
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