The biggest jewelry retailer in India, the Titan Company Ltd. has announced their decision to consider export of gold (COMEX:GCJ14) by the next fiscal year. Titan, which boast of having a direct gold import license have not yet stepped to the export business. Titan informed that they had conducted discussion with their potential partners at Dubai and Singapore and hopes to commence export from April, next month.
The new decision is believed to be the outcome of the current speculations regarding the curbing of India’s gold import duty that gives a spark of hope for jewelry importers and exporters of the country.
According to Titan, they may hit sales once the hiked 10% import duty is revised by the Govt. to the original 2% of last year. In 2013, India had tightened the import duty of gold by increasing it thrice from 2% to 10% of now. While dropping the gold import drastically over the year, the stringent regulations fell as a windfall to the Indian jewelers as it adversely affected their business. Discarding the continuous clamor of Indian jewelry federations to curb import duty, the Govt. emphasized on the significance of reducing the current account deficit of the country citing it more imperative.
Titan has informed the decision of entering the export business officially through press media on Wednesday. Being one of the top gold importers that collects about 75% of their revenue from jewelry sales, Titan has also been caught by the RBI’s 80:20 rules according to which 20% of the gold imported should be set aside for export. According to the Chief Executive of the jewelry division of Titan Co., Mr. C. K Venkataraman, the new decision is the reflection of the 80:20 rule and if it is revised to 70/30, then exporting would be much easier. However, he doesn’t have the hope that the import curb would be eased anytime soon.
Regarding the import curb, India’s finance minister, Mr. P. Chidambaram has informed that it would be revisited only after the exact figures of the CAD is published by early June.