All India Gems and Jewellery Trade Federation (GJF) has asked its members not to sell gold coins and bars to curb imports of the precious metal and help the government in reducing current account deficit.
"We have decided to take a proactive step to control the current account deficit situation. We have requested retailers to stop selling gold bars and coins for temporary period so that imports reduce," said GJF Chairman Haresh Soni.
Quoting government sources, he said that total sale of gold bars and coins was about 35 per cent of the total imports last year. "If we control sale of these items, we can reduce gold imports by 10-15 per cent this year."
GJF has membership of about 42,000 across India and they have responded positively to this call despite their concerns about the survival of the jewellery industry, he said.
India, the world's largest gold consumer, imported 860 tonnes of gold in 2012 calendar year.
During January-March quarter, the country imported 215 tonnes of gold and about 350 tonnes of gold is expected to be imported during April-June quarter.
The government has taken various steps to curb imports and improve the current account deficit situation.
Recently, the import duty on gold was raised to 8 per cent from 6 per cent.
The CAD, which is the difference between the inflow and outflow of foreign currency, is estimated to be at 5 per cent in 2012-13 fiscal. Huge gold import is one of the reasons for India's high CAD that touched 6.7 per cent of GDP in the October-December quarter.
Soni said that the Federation will review the decision to stop sale of gold coins and bars after assessing the situation of import of the yellow metal and rupee value against US dollar.
The jewellers move comes close on the heels of Reliance Capital suspending gold sales across all its businesses.