AOJ E-NEWS: India’s bullion trade is requesting the government to permit export of gold bars made locally as the first step towards establishment of a good delivery Indian gold bar standard analogous with global benchmark London Bullion Market Association good delivery bar. Two trade associations have suggested different ways to go about export.

The India Bullion & Jewellers Association (IBJA) wrote to the PMO last week requesting the government to relax the minimum value addition norm for export of any gold item from 3% (for handmade) and 1.5% (machine made). Bar refining does not result in value addition of 1.5%. This automatically disqualifies exports of gold or silver bars.

It suggests that bars made from imported dore, or raw gold, by Indian refiners be allowed for export at international spot rate. This will help in creating an Indian standard of good delivery that can be used on exchanges like MCX and the planned bullion spot exchange be set up jointly by the Bombay Stock Exchange and IBJA.

Currently, exchanges accept LBMA certifies bars. It will also enable the country earn valuable foreign exchange, IBJA said. However, the Association of Gold Refineries & Mints (AGRM) said importing bars made from dore is not financially viable as miners typically pay $2 to refiners as refining charges, which does not cover cost overheads for them. Instead, the association has asked the government to consider export of bars made from gold scrap -- resident sales of old jewellery for cash. “There’s profit margin only when refiners sell bars made from dore in India,” said Rajesh Khosla, MD, MMTC Pamp.

Courtesy- Economic Times