AOJ Flash News : Vipul Shah meets FM, no assurance on easing gold import norms.

With expectations running high from the first budget of the Narendra Modi government at the Centre, a delegation of diamond traders and representatives of Gems and Jewellery Export Promotion Council (GJEPC) today met the Union Finance Minister, Arun Jaitley in New Delhi demanding relaxation in various rules relating to gems and jewellery industry. However, gold importers may feel disappointed as the Finance Minister remained reluctant to give any assurance on revisiting the much-troubled gold import's 80-20 rule, which allows only the nominated agencies to import gold on the condition that 20 per cent of the imported shipment will be exported. "The Finance Minister didn't give any assurance to look into the Gold import issue. According to him, any change in that would create adverse impact on the Rupee. Hence, we did not get any positive response from him on this," Vipul Shah, chairman, GJEPC told reporter after meeting the Finance Minister on Tuesday. According to a section of traders, the rule adversely affected gold availability, resulting into smuggling of gold. But, the Finance Minister assured the trade body and the diamond players to address other pressing demands. "The burning issue for the diamond traders is the suppliers' credit cycle, which was earlier 180 days and reduced to 90 days in 2011. We have demanded to restore the credit cycle back to 180 days and the minister has assured us to look into it," Shah said. The import payment credit limit was reduced from 120 days to 90 days by the Reserve Bank of India (RBI) in 2011. This posed a major challenge for the diamond traders. If the 90-day period got lapsed, then they would require to get permission from the RBI to make the payment which will further delay the process. Also, currency fluctuations during this period would result into additional burden along with the interest cost for diamond traders. The delegation also demanded setting up of a special notified zone for diamond industry. This is aimed at facilitating the local diamond traders to source rough diamonds directly from the mining companies from their offices in this zone. Many diamond mining companies including De-Beers, Rio Tinto, Alrosa are already lined up to start their offices in India. "But India's complex tax structure is a deterrent. If mining companies open their offices here, traders will easily get their raw material. Already 8-10 companies are lined up for setting up offices here," said Shah. The delegation comprised of diamond merchants and representatives of Surat Diamond Association (SDA) and local MP, Darshana Jarosh besides GJEPC representatives. Courtesy : The Hindu Business Line