GO
Loading...

No rollback of gold restrictions: Indian Finance Minister

Bloomberg | Bloomberg | Getty Images

India's Finance Minister, Palaniappan Chidambaram, does not believe a rollback of restrictions in place in the country to slow gold imports is on the agenda.

The measures were introduced last year to shrink the country's trade deficit.

(Read more: Gold demand slumps as Indian consumption shrinks)

Chidambaram's comments come after media reports suggested that Sonia Gandhi, leader of India's ruling Congress Party, had sent a letter to the Indian government requesting that gold import restrictions be eased. Import duty in India is 10 percent, while 20 percent of Indian gold imports must leave the country as exports.

(Read more: Relax, India's Massive Gold Imports Likely a One-Off)

Jewellery retailers in India surged in response to the news, with Titan Company Limited up 3.8 percent and PC Jeweller up by 4.48 percent. Chidambaram said he had not read the letter.

"Until we have a firm grip of the current account I do not contemplate any rollback of any measure," Chidambaram told CNBC in Davos Thursday. "We will get a full account of the current account deficit only when it is presented and when the year comes to an end," he added.

With a general election on the horizon in 2014, Chidambaram was also cautiously optimistic about the prospects of the governing Congress Party, which has been beset by corruption scandals.

"Elections can never be predictable," he told CNBC Thursday. "Two and a half months is still a long time for people to make up their minds. In 2004, the Congress Party went into the election as an underdog. In 2009, because of incumbency of five years, they said 'you are an underdog again'. So, let's assume we will go into this election as an underdog. I would rather that we go into an election as an underdog than in a triumphal mode," he added.

(Read more: India's Chidambaram Sees 8% Growth by 2015)

On Wednesday Chidambaram said that while developing economies would feel some impact from the U.S. Federal Reserve's winding down of its stimulus, India was in a better position to cope than last year. He also stated that India's growth would speed up to grow by six percent in 2014/15.

"Fiscal consolidation has taken place, there's more FDI (foreign direct investment) flowing into India," Chidambaram said. "We've added to our reserves, the rupee is stable and a number of other measures have been taken to bring stability into the capital market," he added.

Featured

World's elite gathers for Davos 2014

  • Argentina, Buenos Aires

    The global elite have stumbled on an emerging market sell-off that served as a reminder of the risks the global economy still faces.

  • A logo sits on a sign at the World Economic Forum in Davos, Switzerland, on Thursday, Jan. 23, 2014.

    Sure there was talk of women's issues at Davos but this female CEO says one of the questions she got asked a lot was: Are you here as a spouse?

  • The World Economic Forum logo in Davos, Switzerland.

    Here’s a five-point reality check for why people need to stop bashing Davos as an irrelevant gathering of the elite. By the executive director of Wharton's Risk Management Center.

Videos

Davos 2013: Behind the Scenes