The Union government's Export Import (Exim ) policy announcement of free import of gold has failed to bring any cheers to the stock and domestic bullion markets. The gems and jewellery stocks have reacted passively on the Bombay Stock Exchange.

"The announcement of allowing direct import does not make much of a difference. Even the baggage allowance of NRIs, which has been freed from quantitative restriction of 10 kilogram does not make much of material impact," officials with the Gem and Jewellery Export Promotion Council said.

Mr Sanjay Kothari, chairman, Gem and Jewellery Export Promotion Council said, "Domestic gold price is directly linked to the price in the London Metal Exchange. So, policy changes do not create major differences in the domestic bullion market. The same has happened with the new Exim policy announcement as well."

Ms Chanda Narang, CEO, Frazer & Haws, a Delhi-based gold and silver jewellery and decorative firm, said, "Each year, India imports around 500 to 600 tonnes of gold and around 2,700- 3,000tonnes of silver. Now any one can import gold and silver. The importers do not necessarily import through the 19 nominated agencies. This could be the reason for such a
reaction in the stock market.

She added that further clarifications were awaited by the industry. "If free import of gold and silver leads to liberalisation and cutting down of complicated procedures then it's good for the country, "she said.

The stock price of SB&T International dropped to Rs 53 from Wednesday's closoe Rs 57.55 on the BSE , while. Suashish Diamonds dipped from Rs 47.50 to Rs 45-and Sunraj Diamonds slipped from Rs 26.75 to 22.60.

The Classic Diamonds share marginally dipped from Rs 96.30 Rs to 95, while Shrenuj & Co dropped , from Rs 45 to Rs 43. However, Rajesh Exports increased from Rs 121.50 to Rs126.35, and Vaibhav Gems gained from Rs 54. 55 to Rs 56.50.

The announcement has also not created any major reaction in the domestic bullion market. Normally, the gold prices should have declined on expectations of easier, less expensive and timely import of gold in case of direct buying. However, the gold price in the domestic market has continued to keep pace with the international markets. In the domestic market, the spot price of standard gold marginally declined to Rs 6,115 and pure gold to Rs 6,155.

Mr Bakul Mehta, vice chairman GJEPC said, "The unofficial havala rates are lower than the rates in India so it does not make much of an attraction for an importer to get it directly. The new Exim policy announcement has canalised the gold trade in India by giving a fixed format to it." He said that the exporters and gold traders welcomed the ruling because both traders and jewellery exporters would save time and money.

India exported gems and jewellery worth $9.1 billion in 2002/03 (April-March), accounting for nearly one-fifth of the country's total exports. The country buys rough precious stones, mainly from Belgium and Israel, which it cuts and polishes before exporting.