Import restrictions on gold introduced by Government

Import restrictions on gold introduced by Government will continue atleast until March 2014, even though according to Reserve Bank of India , CAD is expected to fall from an all time high of  $82 bn to $ 52 bn .     This was pointed out in  an interview to national news agency, PTI, by Arvind Mayaram, Economic Affairs Secretary. Mr Chidambaram , Finance Minister was also  of the same view, inspite of reports and complaints from trade that availability of gold had decreased and that smuggling of gold from the Gulf region had increased.

Increase in customs duty to 10% and to 15% on jewellery import,  a few month old regulation that 20% of all imported gold had to be exported in value added form and various measures such as restrictions on gold loan caused gold imports to fall from a high of 163 tons in May 2013 to 19.3 tons in November.

Recently, the Gems and Jewellery Trade Federation said it expects India’s gold imports to fall significantly by 20-30% to 500 tons in 2014 on huge price differential between Indian and global gold prices commanding a premium of $100 over LBMA fix.

Worldwide consumer demand declined by 32% from the second quarter (310 tons) to third quarter (148 tons)  as per the World Gold Council’s  Report. The Reserve Bank of India also partially eased restrictions  permitting refineries to import 15% of their gross annual requirement of gold dore bar (semi pure alloy of gold and silver) in the first two months and thereafter as per export performance.


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