New Delhi, 13 May (H.S.):

The Gem & Jewellery Export Promotion Council (GJEPC) said on Wednesday that increasing import duties on gold will not meaningfully curb imports but will instead push up prices, and urged the central government to consult industry stakeholders for a lasting solution.

In a statement issued on Wednesday, the GJEPC observed that raises in import duties seldom reduce gold imports; they primarily lead to higher prices. The council noted that even though gold prices have recently doubled, imports have not fallen proportionately.

According to the GJEPC, higher duties encourage smuggling and raise exporters’ costs. The council added that exporters are now required to furnish bank guarantees of roughly Rs 28–30 lakh per kilogram to purchase duty‑free gold from designated agencies, which is severely straining their working capital.

The GJEPC warned that the most serious impact will be on micro, small and medium enterprises (MSMEs) in the manufacturing sector. The statement said about 80 per cent of the council’s members are facing a “severe cash crisis.”

The government has raised import duties on gold and silver from 6 per cent to 15 per cent. Duty on platinum has been increased from 6.4 per cent to 15.4 per cent. Consequent changes have also been made to duties on gold/silver strings (dore), coins and other related items.

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Hindusthan Samachar / Jun Sarkar