Indian gold imports rise despite import duty.

Despite the hiked import duty and rising premiums in India, Gold jewelry import in the Country is reported to have increased four times in January, indicating an accelerated flow of import from foreign countries. The stringent RBI regulations on gold import together with the increasing premiums had created lack of stocks in Indian jewelries when the highly demanding wedding season was at full swing. As a result, Indian jewelers resorted on foreign countries to satisfy their gold demand.

Indian jewelers boosted their gold supply by importing finished gold jewelries from Dubai and Singapore, as per report. Estimates show that the gold jewelry import in India increased to 4 to 5 tons last month alone from 1 to 1.5 tons just a month earlier. According to the All India Gems and Jewelry Trade Federation, stringent regulations in India have triggered jewelers in the country to depend on other countries to boost their business.

The Federation which includes more than 3,00,000 jewelers in India has recently written to the Congress President Sonia Gandhi to consider easing the hiked 10 % gold import duty which is affecting their business badly. However, Indian Finance Minister, Mr. P. Chidambaram had assured to review the matter by March-end, emphasizing that at present the country needed to focus on curbing the current account deficit which is more important.

According to a Mumbai-based jewelry, the shortage of stocks had forced them to import around 700 to 800 kg of gold jewelry from Dubai in January. The Dubai-based Siroya Jewelers that exports gold to India reported high flow of sales in India in January owing to gold shortage. A few Indian jewelers are also considering increasing their capacities at their overseas manufacturing units. Meantime, import of cheap finished jewelries is also posing a threat to the Indian jewelry industry.

Source : resourceinvestor.com