South Korea Demands Lifting of Restrictions on Gold, Silver Imports by India

SEATTLE (Scrap Monster): South Korea has asked Indian administration to remove the restriction on gold and silver imports by India. The restrictions were imposed in August last year, following sudden surge in imports of precious metals from that country.

As per the free trade agreement (FTA) signed between both the countries in January 2010, India had exempted customs duty on gold imported from South Korea. Also, the 12.5% countervailing duty on gold imports were contained in the Goods and Service Tax (GST). The imports now are levied 3% integrated GST, when compared with 10% customs duty on gold imported from non-FTA countries. In addition, importers are required to apply for and obtain license from the Directorate General of Foreign Trade (DGFT) in order to import gold and silver from South Korea into the country.

ALSO READ: India Mulls Duty-Free Gold Imports From Russia

An Indian government official clarified that it has received a request from South Korea to ease restrictions on gold and silver imports. However, the government has asked South Korean authorities to undertake necessary measures to increase value addition norms.

Meantime, the representatives of the Gems and Jewellery Export Promotion Council (GJEPC) has urged the government to not ease the restrictions, as it is likely to impact shipments by jewellery exporters. The lifting of restrictions may lead to notable jump in gold imports from South Korea, on account of abuse of free trade pact between the two countries. It must be noted that the gold imports from South Africa had recorded dramatic rise in July last year. The imports had totaled $338.6 million during that month, significantly higher when considering the fact that the full-year exports in 2016-’17 had totaled only $70.46 million.

The GJEPC statistics suggest that India’s gold jewellery exports totaled Rs 5,993.19 crores (USD 913.04 Million) during April this year, surging higher by almost 50% in dollar terms when compared with the corresponding month last year.