Mumbai: The Reserve Bank of India and finance ministry officials will recommend that the new government relax strict gold import rules to head off a surge in illegal buying, officials with direct knowledge of the plan said.
Last year, India imposed restrictions on gold imports, the second biggest import after oil, following a steep rise in the country’s current account deficit. However, the curbs spurred smuggling into India, the world’s biggest buyer, through illegal “hawala” channels, which are informal international networks for remitting money.
India’s incoming Prime Minister Narendra Modi has indicated his willingness to remove the gold curbs.
India raised the gold import duty last year to 10 percent from 4 percent and also mandated that 20 percent of imported gold be exported.