Gold imports down sharply in December, allowing the government to continue relaxed norms for gold imports introduced in late November 2014
By Sai Nikesh D
India saw a record climb in gold imports in October and November 2014 with the arrival of the festive season and apprehensions that the government will impose restrictions on imports. According to the Ministry of Commerce, India’s gold imports in November 2014 surged to a record high of around 151.6 tonnes. In terms of value, India’s gold imports of around $5.6 billion in November 2014 was up around 571% y/y, triggering concerns of a widening trade deficit.
However, the government had refrained from imposing import restrictions and had, in a surprise move, scrapped the 80:20 scheme on November 28, 2014 to prevent hoarding and to take advantage of falling oil and gold international prices. It had said that any changes in the gold import policy will depend on the import figures in December.
Expectedly, Rajeev Kher, Commerce Secretary, told sources yesterday that gold imports by India have come down to around 39 tonnes in December 2014 and is expected to remain at around 50 tonnes in January 2015.
Earlier, the Gem and Jewellery Export Promotion Council (GJEPC) had urged the government to avoid imposing restriction on gold imports. Any such move will only help hoarders and spur gold smuggling, Pankaj Parekh, Vice-Chairman, GJEPC, had said.
India’s total gold imports in FY2014-15 are expected to increase by around 20-25% from last year’s 661.7 tonnes as imports during April – December 2014 are already at around 665 tonnes.
This article was published in The Dollar Business on January 8, 2015.