The All India Gems and Jewellery Trade Federation (GJF) is calling on the authorities to bring back the stand-by letter of credit (SBLC) scheme and reduce rates of duty on precious metal imports to rescue the country's beleaguered gold industry.

The SBLC scheme was suspended earlier this year as the Indian authorities sought to calm volatility in the Indian gold market.

Credit squeeze

Since 2003, Indian gold dealers have been able to open SBLCs to import gold on a loan basis, until earlier this year when the central bank made gold importing an essentially cash-on-delivery based activity.

Now, the GJF has written to finance minister, P Chidambaram, urging him to bringing back the SBLC scheme and restore other forms of credit for buying gold that have been suspended by the authorities.

Duty calls

The federation has also called for decreases in rates of duty applied to precious metals.

In September 2013, the government increased the import duty on gold and silver jewellery to 15 per cent from 10 per cent to protect the domestic industry.

The GJF is asking the authorities to slash import duty on these imports to just five per cent.

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