Modi government is expected to come out with a comprehensive gold policy soon to promote the metal industry and the gems and jewellery sector, which is a major contributor to the export basket, sources said. The policy also aims at creating jobs in the gold sector.

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It is likely to focus on promoting domestic gold industry and exports of gems and jewellery, which contributes about 15 per cent to total merchandise outbound shipments, they said. In February, Finance Minister Arun jaitley had announced formulation of a comprehensive gold policy to develop gold as an asset class.

Government think-tank NITI Aayog in August suggested the government to bring down import duty on gold from the existing level of 10 per cent and also asked to slash the GST rate on the precious metal from the current 3 per cent.

Besides, it had recommended review and revamp of the gold monetisation scheme, sovereign gold bond scheme besides setting up of a gold board and bullion exchanges across the country to have greater financialisation of the yellow metal.

The report had also suggested exemption of 3 per cent Integrated Goods and Service Tax (IGST) to be paid by exporter in line with customs duty with a provision of bank guarantee. 

To promote exports, the Gems and Jewellery Export Promotion Council (GJEPC) has asked for support in terms of increasing incentives under the Merchandise Exports from India Scheme (MEIS) to boost shipments.

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Under MEIS, the government provides duty benefits depending on product and country.

Rewards under the scheme are payable as percentage of realised free-on-board value and MEIS duty credit scrip can be transferred or used for payment of a number of duties including the basic customs duty.