The Reserve Bank of India (RBI) 26 November 2014 eased gold imports and scrapped 20:80 scheme. The decision to withdraw the 20:80 scheme will cut smuggling of gold and raise legal shipments into India.
In 2013, the 20:80 scheme was introduced to bring down inbound shipments, sliding rupee and to combat a huge current account deficit (CAD) along with a hike in import duty to 10 percent.
Under the scheme, 20 percent of the imported gold had to be mandatorily exported as finished products like jewellery. Initially only public sector firms and banks were allowed to import gold and later in May 2014 these rules were slightly eased to star and premier export houses.
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