GJF Foresees 35 % Plunge in Indian Gold Import This Fiscal.

MUMBAI : Indian Government’s act of chocking gold supplies from foreign exporters and Indian inbounds has lead to the depressing drop of gold import over the year. The decline in gold import in India is further expected to downside this fiscal, according to the representatives of major gems and jewelry trading bodies of India. Seeking relief from the Govt. to ease the current 10 % hike in gold import duty, the chairman of All India Gems and Jewellery Trade Federation (GJF), Mr. Haresh Soni said that gold import this fiscal would plunge by 35 % if the Govt. does not take steps of relaxation.

The stringent restrictive measures carried out by India to curb the gold import and thereby axing the ballooning Current Account Deficit (CAD) of the country was a windfall to the jewelry sector of India. The gold import restriction that prevails in the country according to GJF could further pull down the percentage of gold intake by 35 % to a year before to 550 tones. While addressing the media, Soni expressed his concerns on the declined gold import in India which has lead to the deficiency of stocks, rendering the artisans jobless. The lack of stocks in the coming festival and wedding seasons in India would make it hard to fulfill the demands of the customers, especially in a country like India which is one of the largest gold consumers of the world.

The World Gold Council on its latest estimate had reported that India’s position of being the world’s largest gold consumer has been dethroned by China owing to the tightening of gold import rules in India. This itself indicates the drastic drop of India’s gold import. Estimates show that India’s bullion import suffered big fall by 40 % in April to January period to settle at $ 27 billion this fiscal. Indian gold import this fiscal accounts to be at 515.65 tones, wherein a majority of 300 tones was purchased by foreign jewelers in the form of fine jewelry to satisfy the demand of the Indian customers. Meantime, the decline of the import of raw materials has also seen to pull down the gold exports of the country over the year in the form of jewelries, medallions and coins.

Commenting on the current account deficit of India, Soni says that gold alone cannot be blamed as the sole reason for the zooming up of CAD, as there are many other commodities and finished products that influence the spiking of CAD. Now that CAD has been successfully brought under control, easing gold import duty is highly necessary under the present condition as it is affecting the jewelry business of more than six crore dependants.

Source : metal.com