สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 7 มกราคม 2557

Thailand keen to resume gold trade with India

The Thai government is in talks with its Indian counterpart to resume the free trade agreement (FTA) in gold jewellery. The southeast Asian nation is keen to export coloured gemstonestudded jewellery to India. India raised the import duty on gold jewellery from Thailand to 15 per cent from 1 per cent in October 2013 to protect the domestic industry which employs nearly 35 lakh artisans. "Thailand is keen to resume gold trade with India. But as of now the Indian government has not taken any decision on the issue," said a commerce ministry official. Earlier, the FTA with Thailand allowed gold jewellery imports at a concessional customs duty of 1 per cent. This concessional rate made gold imports from Thailand attractive, especially considering that the duty for importing the yellow metal from other sources is 10 per cent. Under the origin norms, a trader can import gold jewellery from Thailand if value addition is 20 per cen. "But if that is followed strictly, import of gold jewellery from Thailand will become less attractive as prices of gold in India and Thailand will almost be the same. Thailand is now keen to export studded jewellery to India under the FTA," said Sabyasachi Ray, executive director, Gem & Jewellery Export Promotion Council (GJEPC). Though the government made the 20 per cent value addition mandatory in Thailand, traders bypassed this clause by routing gold ornaments from other origins through Thailand. Haresh Soni, chairman, All India Gem & Jewellery Trade Federation, said huge imports from Thailand took place during the period when import duty on Thailand gold was 1 per cent while the duty on imports from other origins was 4 per cent. But subsequently, imports from Thailand came down drastically as the government increased duty on imports from Thailand to 15 per cent. Soni added that the government will not allow imports of gold jewellery at a concessional rate from Thailand before reducing the import duty on the raw material. "The high import duty on raw material has made Indian gold costlier. In this scenario, the government is expected to first think about the domestic industry and take a call on Thailand's proposal later. We feel that nothing is going to happen immediately."

(Source: Economic Times)

Govt considers easing gold import curbs: Reports

Officials are in discussions to cut a record high import duty on gold and relax rules on exports, government sources said, after the measures helped narrow the country's trade deficit and now threaten to encourage smuggling. India imposed the curbs last year when overseas gold purchases - the country's second most expensive import after oil - pushed its current account deficit to a record and undermined the rupee currency. With three duty hikes last year to a record 10 percent and onerous restrictions tying purchases to exports, official arrivals shrank almost 90 percent in the six months to November, helping China displace India as the world's top gold buyer. The decision to cut the import duty is likely to be taken anytime this month, said one of the government sources, who has direct knowledge of the deliberations but did not want to be named because of the sensitivity of the issue. With the current account deficit much reduced and little impact seen on the rupee from the U.S. Federal Reserve's decision to cut back stimulus, the time may soon be right for authorities to make it easier for gold-hungry Indians to buy. India's current account deficit is now likely to be less than $50 billion in the year to March 31, 2014, down at least $20 billion from earlier estimates, the second source said. Even the governor of India's central bank, whose insistence that 20 percent of gold imports be exported as jewellery has hurt the most, has suggested there may come a time for change. Raghuram Rajan also said smuggling would rise if curbs on gold imports continued for too long. Indians are smuggling in more bullion than ever as buyers seek alternative sources of the metal, which is often given as gifts at weddings and festivals in the country. Jewellers, who estimate India's monthly demand to be nearer 60 tonnes, have been asking for a duty cut to 8 percent and have the backing of the main opposition Bharatiya Janata Party, which is leading in state polls ahead of national elections due this year. A final decision lies with Finance Minister P. Chidambaram, who has so far resisted a cut but shifted last week to say he was in favour of continuing "some restraint" on imports.

(Source: Economic Times)

Intensify reforms, cut subsidies for economic recovery: Rangarajan

Underlining the need for pump-priming the economy by intensifying reforms and trimming subsidies, Prime Minister's Economic Advisory Council Chairman C Rangarajan today said if India grew at 8 to 9 per cent each year, per capita GDP would rise to $ 10,000 by 2025. Emphasising the need to overcome the current low growth phase as quickly as possible, Rangarajan said growth was the answer to many of the country's socio-economic problems and several schemes aimed at broadening the base of growth had been launched recently. Stating that raising savings and investment could take India back to the very high levels of growth seen earlier, he said taming inflation, containing current account deficit and ensuring fiscal consolidation were the major tasks requiring immediate attention. While efforts must be made to raise revenue-GDP ratio, it is imperative to check expenditures, particularly subsidies which need to be pruned, well focussed and prioritized. What is needed is to have a fix on the quantum of subsidies to be provided as a proportion of GDP or of government revenue, he said referring to government's hint at reducing subsidies from 2.6 per cent of GDP in 2012-13 to 1.6 per cent of GDP in 2015-16. Regarding high inflation, Rangarajan said that for sustained high growth, price stability was a pre-condition and added that monetary policy and fiscal policy had to play their part in containing overall demand pressures.

(Source: Economic Times)

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