NEW DELHI (Reuters) - The Reserve Bank of India (RBI) will not change its gold import rules, sources with knowledge of the matter said, responding to a report that the world’s second-largest consumer of the precious metal was keen to limit imports.
The RBI has already eased some import controls by allowing seven trading houses to import the metal, driving a sharp jump in overseas buying despite a record import duty of 10 percent.
A surge rise in gold imports widened the trade deficit to an 18-month high of $14.25 billion in September, creating concerns for the government of Prime Minister Narendra Modi, an unidentified Finance Ministry official told the Economic Times newspaper.
The ministry also sent a letter to the central bank seeking a review of the May relaxations, according to the report. But two officials familiar with the RBI’s policies told Reuters on Monday it was not considering any change.
The Finance Ministry could not be reached for comment.
Gold is India’s second-biggest expense on imports after oil, and shipments of the metal tend to jump ahead of key festivals in October.
Indian gold traders and jewellers had hoped the new government would lower duties, following election campaign statements that any action should take into account the interests of the public and gold traders.
But Trade Minister Nirmala Sitharaman said in September there was no immediate plan to cut the duty.
Despite the high duty, the rise in legal imports of gold into India is helping the government lower smuggling. It is also becoming more risky for couriers following a rise in seizures, mainly at airports.
Reporting by Neha Dasgupta, Suvashree Dey Choudhury and Krishna N Das; Editing by Clarence Fernandez and Louise Heavens