Jewellery makers see fall in supply of gold

Fall in gold supply was accentuated by the fact that nominated agencies didn't release the commodity, as they were expecting rationalisation in import duty

Through three weeks, jewellery exporters have seen a fall in the supply of gold and this has hit the fabrication segment. The fall resulted from delay by the Directorate General of Foreign Trade in clearing gold procurement requests by manufacturers. Also, nominated agencies have deferred supply to bulk consumers amid expectations of rationalisation in import duty.

According to Reserve Bank of India (RBI) guidelines, nominated agencies should make 20 per cent of the imported gold available to jewellery exporters. On producing proof of exports (20 per cent of the imported quantity), they are allowed another lot of imports. This norm, implemented in August last year, was aimed at curbing gold imports into India and cut the country’s burgeoning current account deficit(CAD).

“Despite showing proof of jewellery exports, authorities have been holding on to the requests of jewellery manufacturers for several weeks. For the last three weeks, there was virtually no supply of gold to jewellery exporters, a dry spell for them,” said Pankaj Parekh, vice-chairman, Gems & Jewellery Export Promotion Council (GJEPC).

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