MUMBAI/LONDON: Indian gold imports may fall 70 percent in the final quarter of 2013 from 255 tonnes in the year-ago period and are expected to be half usual levels at 500-550 tonnes next year if new import rules are maintained, a top trade body official said. To curb a record trade deficit, India imposed an import duty of 10 percent on gold, and tied imports for domestic consumption to exports, creating scarce supply of the yellow metal and boosting premiums to a record.
As a result, Indians have depended heavily on old heirlooms and smuggled yellow metal to meet wedding demand.
“Year 2014 seems to be a difficult one for the Indian gem and jewellery industry so far as gold imports are concerned,” Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation (GJF), said in an interview at the Reuters Global Gold Forum. India, which may import a lower-than-usual 700-750 tonnes in 2013, is unlikely to ease its import policy or the customs duty until the trade deficit is under control, Bamalwa added.
“Demand (for) jewellery has not yet picked up, so the industry is not yet in panic, but I am not (very) sure about the future - say, after 30 days,” said Bamalwa.
The World Gold Council (WGC) cut its forecast for Indian gold demand earlier this month, predicting the country could also lose its crown as the world’s biggest consumer of bullion to China. The WGC said Indian demand could be 900 tonnes in 2013, from its previous forecast of 1,000 tonnes. Fourth-quarter demand is expected to be low because consumers brought forward wedding purchases to April and May, when gold prices fell drastically, Bamalwa said.
Reuters
