New Delhi: The finance ministry has written to the central bank to consider reimposing some restrictions on gold imports after inbound shipments surged in the last few months, widening the trade deficit, the Economic Times reported on Monday.
The central bank eased some gold import rules in May by allowing seven more private agencies to ship in the precious metal, driving a sharp jump in overseas buying despite a record import duty of 10%.
A 450% rise in gold imports expanded the trade deficit to an 18-month high of $14.25 billion in September, creating concerns for the government, an unidentified finance ministry official told the Economic Times.
Gold is India’s second-biggest expense on imports after oil, and shipments of the metal tend to jump ahead of key festivals in October.
The finance ministry and the central bank, the Reserve Bank of India (RBI), could not immediately be reached for comment.
Indian gold traders and jewellers had hoped the new government of Prime Minister Narendra Modi would lower the import duty, following election campaign statements that any action on gold should take into account the interests of the public and traders.
But trade minister Nirmala Sitharaman said in September there was no immediate plan to cut the gold import duty. Reuters
