Davos: Finance Minister P Chidambaram on Thursday said curbs on gold imports can be rolled back only after India obtains a firm grip on the Current Account Deficit (CAD).
"Until we have a firm grip on the CAD, I don't contemplate any roll back of any measure," he said when asked whether the government is thinking of relaxing the gold import curbs.
His comments come after Congress President Sonia Gandhi wrote to the Commerce Ministry asking it to look into gems and jewellery industry's demand for a cut in import duty on gold and relaxation of the 80:20 import rule.
"We will get the full idea of the CAD only when Budget is presented," Chidambaram told a TV channel.
Under the 80:20 rule, new imports are not allowed until 20 percent of the previous shipments are exported.
Gold imports fell to 19.3 tonnes in November from a high of 162 tonnes in May in the wake of a series of curbs by both the government and the RBI.
The government had increased customs duty on gold thrice in 2013 to 10 percent while the RBI linked imports of the metal to exports amid a widening current account gap and depreciation of the rupee.
CAD, which is the difference between the inflow and outflow of foreign exchange, touched a record high of USD 88.2 billion in 2012-13 fiscal. The government expects to bring it down to USD 50 billion this fiscal.
The CAD in the first half (April-September) of the current fiscal narrowed to USD 26.9 billion (3.1 percent of GDP), from USD 37.9 billion (4.5 percent of GDP) in the first half of the previous fiscal.
Declining gold imports has also contributed to the improvement in CAD, which dropped to 1.2 percent in second quarter, as against 4.9 percent in the first quarter.
PTI
First Published: Thursday, January 23, 2014, 17:37