New Delhi: Citing prevailing favourable factors boosting the country's overall trade performance, the Economic Survey today said it is an "opportune time" to remove restrictions on gold imports.
The robust external-sector outcome in the current year of moderate trade and current account deficits, abundant financial flows, a build-up of foreign exchange reserves and broadly stable exchange rate movement points to a return to the path of strength and resilience that was in evidence before the global financial crisis of 2008, it said.
"The overall trade performance signaled an opportune time for withdrawal of restrictions on gold imports," said the Survey for 2014-15, tabled in Parliament.
In 2013-14, India's trade deficit declined to USD 135.8 billion from a high level of USD 190.3 billion in 2012-13, mainly on account of a decline in the growth of imports even though growth in exports was sluggish at 4.7 percent, it said.
The decline in imports was attributed to lower growth in oil imports (0.4 percent) and negative growth in gold and silver imports.
The survey said financial inflows in excess of the requirements have helped shore up foreign exchange reserves (USD 328.7 billion at the end of January 2015). They have helped lessen the vulnerability concern that led to serious stress last year.
In order to check the rising CAD, the government had raised import duty on gold to 10 percent, while RBI imposed curbs on import of gold and also laid down various pre- conditions for inward shipments of the precious metal.
The restrictions on gold imports led to a rise in cases of smuggling which went up in 2013-14 to 2,441. In 2012-13 and 2011-12, the number of such cases stood at 869 and 500 respectively.
In November, easing restrictions on gold imports, Reserve Bank scrapped the controversial 80:20 scheme, according to which at least 20 per cent gold imported had to be mandatorily exported before bringing in new lots.
Current Account Deficit (CAD), which is the excess of foreign exchange outflows over inflows, touched a historic high of USD 88 billion or 4.7 percent of GDP in 2012-13, mainly due to high imports of gold and petroleum products.
Gems and jewellery exports contribute about 15 percent to the country's total outbound shipments. In 2013-14, the exports were to the tune of USD 39.5 billion as against total exports of about USD 312 billion during the fiscal.
CAD came down to USD 32.4 billion or 1.7 per cent of GDP in 2013-14.
