Following the clarification by the Customs department on certain procedural aspects, jewellers have started placing orders for importing gold, which had been at a standstill for one and a half months. Import in August is estimated at less than 10 tonnes, among the lowest monthly data in many years.
"Fresh purchase orders have started flowing in. With this, gold imports into India will commence soon," said Vipul Shah, chairman of Gems and Jewellery Export Promotion Council (GJEPC). "We believe 20-25 tonnes gold will be imported into India in the current month, of which five-six tonnes will be re-exported."
An important clarification in the Customs notification is that export certificates, once issued, should be acceptable for all consignments. Currently, the department seeks certificates with each consignment.
However, some issues remain. According to the new notification, banks are not allowed to import a third lot of gold unless the remittance of the first export consignment is reflected in the account of exporters.
Another provision of the newly-issued notification, "the nominated agencies can be visited by Customs officers for surprise audit or checks, at least once in three months", has importers worried. Many of them have been advised to wait before clarity on the surprise audit emerges. Colin Shah, founder and managing director at Kama Schachter, a diamond jewellery manufacturer and retailer, said, "Clauses relating to procurement of gold from government agencies like MMTC
and STC have to be relaxed. GJEPC is currently working on it in coordination with the commerce ministry."
Meanwhile, in the last one and a half months when official imports were virtually on standstill, inflows from scrap gold and off-loading by investors who had bought it when prices were lower have helped business going for jewellers.
However, smuggled gold inflows has also been much higher. In the last one month, 20-25 tonnes of inflows came from scrap and selling by investors, said a bullion analyst.