Due to the restrictions on the gold imports smuggling of gold in to India is rampant. To address the problem the Government seems to be considering the relaxation of the curbs on gold imports.
In order to control the Current Account Deficit (CAD), the Government has increased import duty on gold. In addition to it RBI pinned many restrictions and conditions on import of the yellow metal consumption of which is necessary due to traditions in India.
Talking on it The Commerce and Industry Minister Anand Sharma said that the Government is waiting for the appropriate time to take steps to relax the restrictions on the imports and check smuggling.
He said, "We need a balanced approach. We are allowing gold imports for the industry usage. I don't think they can be drastically brought down...That is why, I have always favoured a balance, so that we do not run the risk of illicit trade, that is, smuggling of gold.”
He said that the Government is looking in to the genuine demands and also to save foreign exchange by restricting the imports. The gems and jewelry exporters need to import. In that case the imports will be less than exports.
The RBI Governor Raghuram Rajan is also in the opinion that the prolonged restriction on the gold imports may give room for more smuggling of gold as he spoke on a TV channel on Monday.