New Delhi, Feb 20: India Wednesday announced suspension of gold jewellery imports from Thailand, in a bid to discourage the import of the yellow metal, which is the major cause of the country’s widening current account deficit.
Commerce and Industry Ministry has asked the department of revenue to issue a notification in this regard. The suspension of gold imports will be done under the provisions of the so-called “Early Harvest Scheme”.
“In view of the increasing import of gold jewellery from Thailand, the department of commerce has asked the department of revenue to issue notification suspending the import of gold jewellery from Thailand under the provisions of Early Harvest Scheme till the certificates of origin issued by Thailand are verified to our satisfaction,” the commerce and industry ministry said in a statement.
India is the largest importer of gold. A lot of gold jewellery is imported from Thailand due to low customs duties. There is a spurt in gold jewellery imports from Thailand in the recent weeks due to the hike in customs duty.
Last month, the government hiked import duty on gold to 6 percent from earlier rate of 4 percent in a bid to control ballooning current account deficit that hit a record high of 5.4 percent of the country’s gross domestic product (GDP) in the second quarter of the current financial year.
Gold is the second highest contributor to India’s import bill after petroleum product. In the first three quarter of the current financial year, India imported gold worth nearly $38 billion. Total value of gold import in 2011-12 was $56.5 billion.