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Record gold imports not a worry for government as import bill will not cross $36 billion |
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KOLKATA: Gold imports may top 1,000 tonne this year due to lower international prices, say traders.
Jewellers and bullion dealers said high imports may not be a matter of worry for the government as import bill for gold will not exceed $36 billion, which is lower than the record 969 tonne imported in 2011 for $58 billion. Economists say higher import of gold may not cause worry as commodity prices are historically low. "International prices have gone down to $1,050 per ounce which has fuelled gold imports this year," Bachhraj Bamalwa, director of All India Gem & Jewellery Trade Federation, told ET.
According to Bamalwa, till September about 800 tonne of gold had been imported, while in October and November, it was 143 tonne. He said in December 50-60 tonne of gold are generally imported, which would take imports to over 1,000 tonne. In 2014, gold import stood at about 900 tonne, he said.
However, Bamalwa said gold prices went up last Friday. "Gold for February delivery, the most actively traded contract, closed up 2.2% at $1,084.10 a troy ounce, the highest settlement since November 11. But a Fed rate hike is expected on December 16 which may bring down the price of gold," he said.
Economists said even if imports increase, there no immediate worry for the government. Anis Chakravarty, senior director and lead economist at Deloitte India, said high imports of gold will not have much impact on the current account deficit of the country.
"Commodity prices are historically low. The two main items that inflate the country's import bill are crude oil and gold. Prices of both have remained in bearish mode this year. Therefore, even if high volumes of gold are imported, the impact will not be significant on the country's current account deficit (CAD)." However, Chakravarty said if commodity prices push up next year, and demand continues to be the same, there will be some problem for the government on the CAD front."However, import duty on gold will act as an impediment for higher import if gold prices go up," Chakravarty said.
Source : economictimes.indiatimes.com
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