Indian gold imports decline

The gold imports by India during the first fortnight of December have dropped sharply when compared with the previous month.

The imports, which had totaled 150 tonnes during November, have fallen to less than 25 tonnes during the first two weeks of December.

The gold imports by the country plunged despite easing of import curbs by the Reserve Bank of India (RBI). During end-November, RBI had quashed the controversial 80:20 gold import rule which had made it mandatory for importing agencies to export 20% of the imported gold before bringing in new gold consignments. The move was feared to boost legal shipments of gold into the country. Contrary to all such fears, gold imports have slowed down since the abolition of the 80:20 gold import rule.

In an attempt to check the current account deficit (CAD), the previous government had imposed several curbs on gold imports into the country- increased gold import duty and 80:20 gold import rule, being the notable ones. In May this year, the government had relaxed the 80:20 rule by allowing six private sector trading firms to import gold under the scheme, in addition to state-owned agencies and banks.

With inward shipments of gold dropping sharply, the Indian government is unlikely to impose fresh curbs on gold imports said senior government official. Meanwhile, there have been demands from various quarters to lower the high duty on gold imports into the country. But, the government has ruled out any probability of duty cut in the near term. The government is likely to consider the proposal only during the next general fiscal budget.