India May Scrap Import Curbs on Gold-Silver Alloy

Indian-GovtMumbai: Officials of the Reserve Bank of India (RBI) and the country’s finance ministry are in talks to scrap bulk import licenses for a gold-silver alloy used by domestic refiners, months after relaxing curbs on gold imports, it is learnt.

Gold is India’s second-highest import in value terms, and a jump in imports widened the current account deficit in 2013, sparking the country’s worst currency turmoil since a balance of payments crisis in 1991.

An alloy of gold and silver, called dore, from which refineries produce pure gold, forms about 150 tonnes of imports each year and attracts a duty of 8.24 percent, which is less than the duty of 10.30 percent on refined gold.

The RBI wants to remove all restrictions on refiners while the finance ministry has raised concerns over tax evasion, the sources said.

Government and RBI officials met late last month to examine the proposal. “The finance ministry is not in favour of relaxing conditions for import of gold dore as it could lead to tax evasion,” said a senior finance ministry official, who declined to be identified because he is not authorized to speak to the media.