The government has adopted a new policy, allowing the local jewellers for the first time to import raw gold and refine it.

At the same time, jewellers can sell precious objects - jewellery, bars and coins - made of the refined gold both in the local and overseas markets.

The Ministry of Commerce issued a gazette notification to this effect on June 3, 2021.

With this move, Bangladesh is expected to enter into a new era of industrialisation and be enlisted as a gold refiner country in the international market, according to the notification, to be implemented with immediate effect.

The new policy -- 'Gold Policy-2018 (amended)-2021' -- will help attract investment and create a skilled workforce, it said.

The policy will allow Bangladesh to export gold bars after meeting the local demand, thus helping diversification of the country's export basket, the notification further said.

The local demand for new gold is 18-36 tonnes a year, said the notification, referring to industry insiders.

It is assumed that the maximum portion of the demand is not met by legally-imported gold.

The government framed the 'Gold Policy-2018' earlier with a view to curbing irregularities, including smuggling of the valuable product.

Businessmen can now import a certain amount of gold for jewellery manufacturing through receiving licenses from the central bank.

One of the targets of the amended policy is to help inspire export of gold jewellery, bars and coins.

The policy will also simplify and rationalise existing duty and bond facilities to the gold exporters.

Standard operating procedure (SOP) will be followed in establishing and operating the gold refinery units.

On the other hand, the new policy will ensure a control and monitoring system to create a business-friendly environment in this sector.

The world market for gold jewellery was equivalent to US$ 229.3 billion in 2019 - the market is expected to reach US$ 291.7 billion in 2025.

There are two types of gold jewellery available - handmade and machine made. About 80 per cent of the handmade gold jewellery is being produced in India and Bangladesh.

But Bangladesh has so far failed to tap the export opportunity. It earned a meagre US$ 672 from gold jewellery sector during the 2014-2015 fiscal year, as per the Export Promotion Bureau data.

Talking to the FE, former president of the Bangladesh Jewellers' Samity (BAJUS) Ganga Charan Malakar said it (the new policy) was a good initiative.

But skilled manpower, business-friendly environment and tax facilities have to be ensured to get better results from the policy, he opined.

He, however, said the government should exempt existing 5.0 per cent Value Added Tax (VAT) at jewellers' level as it increases the cost of gold ornaments.

Currently, importers pay Tk 2,000 as customs duty on per bhori (11.66gm) of gold.

Moreover, 5.0 per cent VAT remains imposed each at jewellers' and customers' level, added Ganga Charan, chairman of the Venus Jewellers.