News about people being caught while trying to smuggle gold items at different international airports across the country is very common these days. In fact, some reports suggest that gold smuggling shot up by nearly 250 per cent in the last six months. The smugglers figure out innovative ways of smuggling the yellow metal every single time, to evade the import duty on gold. What makes gold smuggling attractive is the lower price of gold abroad, especially in the Middle East. If import duty on gold is reduced by the government, it will make gold import cheaper and will also help in keeping a check on the rising gold prices in the country. These observations were made by O. Asher, Managing Director-India Operation of Malabar Gold and Diamonds, one of the largest gold and diamond retailer in the country.
Interestingly, as per market and media reports India's gold imports may exceed 700 tonnes in this financial year, while exports can reach upto $43 billion in the same period. India which is the world's second largest jewellery market in the world after China may see a reduction in the cases of gold smuggling. “We are trying to urge the government to bring down the import duty on gold so that it would lead to a reduction of gold smuggling. I feel that the government is seriously considering a reduction in the import duty on gold,” Asher told THE WEEK.
As per the World Gold Council (WGC), India's gold demand had declined by 24 per cent in the July-September quarter due to the Goods and Services Tax (GST) and Anti-Money Laundering legislation (AML) on jewellery retail transactions. In order to boost the demand for gold, Indian jewellers are demanding a reduction of import duty on gold imports from the current 10 per cent to say 4-5 per cent.
“Whenever there is a new measure brought in by the government they are bound to face initial glitches. Once they are resolved, the whole system becomes streamlined. When demonetisation was announced we had seen some challenging times because people were not having cash to buy gold. Now all that has changed. Things are back on track and there has been a healthy demand. Recently, I was in Malaysia and they have GST system that is doing very well in that country. I feel it will do well in India too. Gold is like an international currency and one of the best investment options where a consumer can invest. I feel that gold is something that is very close to Indian tradition and will always remain in demand no matter what comes, be it demonetisation or GST,” added Asher.
Meanwhile, the government is also trying to make all the gold products that are sold in India under the Hallmark regulations from January 2018. “We strongly believe in such a move as it will raise the quality of gold items sold across India. Though there are many unorganised players in the country it will become mandatory for them to sell only Hallmark gold items. We have been following it since the early 2000 and all the items across our stores are Hallmark items,” remarked Asher.
Malabar Gold and Diamonds, which started its business in 1993, is aggressively trying to woo its customers by different offers. Recently, in Bengaluru it handed over 5 kilograms of gold to Jackulin Carolin, a homemaker from Mangalore, who had won a lucky draw. The gold was presented by Bollywood actress, Tamannaah Bhatia, who is also the brand Ambassador of the company.
