India, which vies with China as the world’s top consumer of bullion, is working on new policies to improve transparency and help expand its $19 billion gold jewelry industry, according to people with knowledge of the matter. The plans being worked out by the finance and commerce ministries along with industry groups should be finalized by the end of March, the people said, asking not to be identified because they aren’t authorized to speak publicly.
The launch of a spot bullion exchange, to make gold supply more transparent and help enforce purity standards, is under consideration, the people said.
An import tax of 10 percent could also be reduced as the government seeks to eliminate smuggling, they said. The plans also include a dedicated bank for the jewelry industry, according to one of the sources.
The overhaul of India’s disorganized and fragmented gold jewelry industry is meant to bolster confidence among consumers, where the giving of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Enforcing purity standards and allowing supply chains to be easily tracked are ways to enhance trust in the metal.
The estimate for the size of the sector was given by the Mumbai-based India Bullion and Jewellers Association Ltd.