Jul 23, 2013 04:39 PM IST | Source: CNBC-TV18

RBI moves not impacting us; sector to be hit: Tara Jewels

In an interview to CNBC-TV18, Rajeev Sheth, CMD, Tara Jewels elaborates on RBIs' moves to curb gold imports. He says that the company already imports 85 percent of its products and that the company will not be impacted by the central bank's measures.

In an interview to CNBC-TV18, Rajeev Sheth, CMD, Tara Jewels speaks about his reading of the Reserve Bank of India's (RBI) moves to tighten gold imports.

He says that the company will not be affected by the rider of having atleast 20 percent exports from the imported quantitiy. We already export 85 percent of our products, he says. However, exports of products will be affected where there is lesser value addition to the yellow metal, he feels.

Also read: RBI puts more curbs on gold imports

Below is the edited transcript of his interview to CNBC-TV18.

Q: How will Reserve Bank of India (RBIs) rules impact your company? Do you export? If so, what percentage of your production?

A: Currently 85 percent of our total business is exports. So, any of the RBI regulations are not affecting us as a company as we are way beyond the 20 percent norm that they are talking about.

Q: Do you expect business to be a little better? Will there be positives because everybody will want you to export so that they can import for domestic consumption? Are you expecting easier credit? Would this rule be positive for you in any sense?

A: If there is clarity on the fact that everything that was exercised earlier has now been revoked which means purchase of gold is available on standby letter of credit and gold loan facilities go back to what they used to be, then it will make a big difference for the entire industry.

All that the government now, from my understanding all that they are wanting to see through is that the total import, 20 percent of our total import actually makes it to the export market. So, it will make a big difference to the industry.

Q: What is your sense of what the exports will look like in FY14 for the industry per se? Is it going to be worse than the 68 million tonnes that we saw in FY13?

A: That will be a conversation that is too large for me to be able to answer. I believe that certain gold exports will get affected especially the type of gold jewellery that was being exported.

As long as there is enough value addition, which means diamond studded gold jewellery and plain gold jewellery that takes a lot of labour into it that will continue performing as it has performed. But articles of low labour content or low add value will take a hit.

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