Commerce and Industry Minister Suresh Prabhu on Friday said that he has taken up with the finance ministry the issue concerning credit to the gems and jewellery sector to ensure adequate availability of funds for them.
Prabhu also said that the ministries are looking at the industry’s demand for cutting import duty on gold to 4 percent from the current 10 per cent.
The industry also wants a reduction in the duty on the diamond to 2.5 per cent from 7.5 per cent.
“This is one of the important issues…for the industry that is export-oriented… If you have import duties, the working capital gets blocked up. So, we are already working on that.
“At the same time, the Ministry of Finance has a responsibility to curtail CAD (current account deficit), therefore they are also trying to find out how we can keep the imports under control. So, we have to balance both together,” the minister told reporters here.
On financing issues of the sector, Prabhu said that meetings were held with bankers to address the matter as the genuine needs of the industry should be looked at.
“I have again taken up the issue with the finance ministry and we will make sure that the industry is not starved of necessary finances,” he added.
The gems and jewelery sector, especially the diamond industry, is facing credit crunch as banks have tightened their hands following the Rs 14,000-crore Nirav Modi scam in Punjab National Bank.
The minister also stated that the government would soon come out with a gold policy and set up a domestic gold council to promote the growth of the sector.