NEW DELHI, June 27: The government has ruled out duty free import of gold as demanded by gold merchants to bolster country's sagging exports.

Commerce ministry sources today said imported gold was duty free for gems and jewellery exporters as it was an important raw material for them.

The sources said in the past some difficulty was faced by jewellery exporters because of non-availability of imported gold as it was routed through MMTC.

Now this problem has been tackled with the government permitting selected public sector banks to import gold to make available more channels for purchase of this crucial raw material.

If the gold merchants were demanding duty free import of gold to bolster exports, it was already available but if they were demanding total duty free import of the yellow metal then it was unlikely to be permitted at this stage, the sources said.

Regarding the action plan submitted by the apparel export promotion council, the sources said most of it had been accepted by the government.

The council had demanded among others easy import of machinery by garment exporters and stepping up of SSI investment limit from Rs 3 crore to Rs 10 crore for purchase of machinery.

The council felt if its action plan was implemented, the apparel exports could be stepped up to 5.4 billion dollars this year and increase it further to around nine billion dollars by the turn of the century.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.