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Monday, 24th October 2005 (4395 views)

The liberalisation of India's gold imports may not be finalised for some time, as the Reserve Bank of India (RBI) is anxious to avoid destabilising the country's reserves.

The Ministry of Finance and the RBI have been discussing the liberalisation of the Indian gold import policy, but are reported to be acting cautiously.

"As things stand, import by all does not appear to be a realistic proposition," the Ministry of Finance told the Hindu Business Line.

Currently banks and other nominated agencies can import gold bullion, but individuals are not permitted to do so.

However, the RBI expressed worry that if gold importing spread to individuals it could undermine the country's foreign exchange reserves and encourage individuals to invest in gold rather than financial products.

The ministers are thought to be discussing proposals to widen the scope of the import laws by allowing all registered export houses to import gold.

If passed, this could create around 2,000 importers.

All payments for imports of the precious metal would have to be carried out through regulated banking channels and the terms of the Foreign Exchange Management Act followed.

 

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