Sonia Gandhi seeks gold import duty cut, jewellery stocks soar
Congress president Sonia Gandhi has written to the commerce ministry seeking a cut in the import duty on gold, reports ET Now, citing government sources.
Titan Company Limited closed the day up 3.78%, at Rs 225.05.Gitanjali Gems surged 6.16% to Rs 71.55.Tribhovandas Bhimji Zaveri jewellers closed at Rs 139.50, up 6.86%.PC Jeweller gained 4.48% to close the day at Rs 80.50.
Reacting to the news, brokerage Sharekhan says, "if the same comes through it would Reacting to the news, brokerage Sharekhan says, "if the same comes through it would be positive for jewellery retailers like Titan, TBZ, etc."
"Also, since the decline in gold imports - supported by import curbs - has been instrumental in reducing current account gap, the relaxation in import duty may happen in a phased manner," it adds.
Gold imports fell to 19.3 tonne in November from a high of 162 tonne in May in the wake of a series of curbs by both the government and the RBI.
These included raising Customs duty on standard gold to 10 per cent from 2 per cent to restrict imports that bloated the current account deficit to an all-time high of 4.8 per cent of gross domestic product, or $88 billion in 2012-13.
Besides, the RBI had in July introduced an 80:20 scheme - 20 pe norm. The government also banned trading of gold in special economic zones. The measures had the desired impact of slowing down gold and silver imports to $25.5 billion in the first eight months of the fiscal, from $33.5 billion in the year earlier.
As per the RBI, the CAD is likely to be in the range of $56 billion against the lifetime high of $88.2 billion in the previous year.
It may be noted that India used to be the world's biggest buyer of the bullion until the government introduced the curbs in order to contain a record current account deficit.