Chidambaram rules out gold import ban, again urges public to moderate demand

Finance Minister P Chidambaram has ruled out a complete ban on gold imports while again appealing to the people to moderate their demand for the precious metal.

Attributing the high current account deficit (CAD) to mainly gold imports, the finance minister said the inward shipments of the precious metal resulted in outgo of $50 billion.

"We cannot completely ban import of gold. There is a long time attachment to gold in this country. I am requesting... Can we for, sometime, moderate the demand for gold? Can we reduce our appetite for gold? If you are buying, say 20 grams, can you buy 10 grams?" he said while addressing a press conference in Jaipur.

Gold imports in June are estimated to have fallen to around 31 tonnes, down from 162 tonnes in May and 141 tonnes in April.

"We have a CAD. $50 billion is the cost of gold. I am appealing to the people of India to moderate demand for gold," Chidambaram added.

High imports strain CAD, which hit a record high of 4.8 per cent in 2012-13.

The government has raised the import duty on the yellow metal thrice in a year, including a recent hike of 2 per cent recently, to 8 per cent. Besides, the Reserve Bank of India (RBI), too, has put restrictions on banks on importing gold in order to curb the demand for the metal.

India is the largest importer of gold and is mainly utilised to meet demand of the jewellery industry.

The imports stood at around 830 tonnes in 2012-13. In value terms, gold and silver imports are estimated to have declined substantially to $2.45 billion in June, from $8.39 billion in May.

During the first three months of the current financial year, April-June, inward shipments stood at to $18.33 billion in value terms.

With inputs from PTI