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India to Suspend Gold Jewelry Imports from Thailand

Feb 21, 2013 5:13 AM   By Dilipp S Nag
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RAPAPORT... India is planning to suspend its gold jewelry imports from Thailand as the government has expressed concern that the incoming jewelry does not have 20 percent added value as stipulated in the foreign trade agreement between the two countries.

“In view of the increasing import of gold jewelry from Thailand, the Department of Commerce has asked the Department of Revenue to issue notification suspending the import of gold jewelry from Thailand under the provisions of Early Harvest Scheme until the certificates of origin issued by Thailand are verified to our satisfaction,” according to a government statement issued on Wednesday.

The Early Harvest Scheme, signed by India and Thailand in 2004, allows imports of gold jewelry at a lower duty of 1 percent, while such imports from other countries are charged around an 11 percent duty. Gold jewelry imports from Thailand increased over the course of the past year as India raised the import duty on bullion to 6 percent in phases in an effort to control its high current account deficit.

India's gold jewelry imports jumped to $5 billion in 2012 from $832.2 million a year earlier, data from the Gem & Jewelry Export Promotion Council (GJEPC) showed. Specific import figures from Thailand were not immediately available.

An industry official stated that as per the foreign trade agreement, the jewelry coming from Thailand should have a value addition of 20 percent in that country. But if there is no mention of origin, then how can gold jewelry imports be allowed 1 percent, he added.

“You could import jewelry from Thailand at 1 percent so you can understand what could happen. Some other country will go to Thailand and export from there to India,” the official noted.

Industry officials had earlier requested the government take some action, alleging that unscrupulous players were taking the advantage of the concessional duty by importing jewelry from Thailand.
Tags: ban, Dilipp S Nag, gold, Gold jewelry, Import, India, Jewelry, Suspend, thailand
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