India Associations Lobby Government Over Gold Changes

Indian gold and diamond industry heads are lobbying the government to reduce import tariffs on gold bars and allow them to be exported, thus making the country a trading center in bullion and creating jobs.

Industry associations have submitted proposals to the Finance Minister in the hope that policy changes may be announced on July 8, when the new government presents its annual budget.

They are hoping the government will halve its import levy on silver and reduce taxes on gold bar exports to enable them to be competitive with international prices. A cut in tariffs on silver could also enlarge the market for the metal and jewelry made from it by making it more affordable for people on lower incomes.

Meanwhile, abolishing the import duty on gold could help attract mining firms and global trading companies to establish storage plants in India from which they could export to other countries.

India does not permit exports of gold bars but allows firms to sell gold and silver jewelry and coins. Domestic gold prices sometimes rise well above world prices due to the one-way traffic in gold.

India is the world's largest importer of gold and cutter and polisher of diamonds. It buys approximately 70 percent of its annual gold needs, around 800 tons, from abroad.