Gold News

Big Drop in Indian Silver and Gold Bullion Imports

First quarter figures suggest 55% drop in Gold Bullion imports...

IMPORTS of gold by  India, the world's largest gold consumer, fell by over 55% in March, with jewelers shutting down their establishments across the country demanding a rollback of the duty hike proposed in the Union Budget, writes MineWeb's Shivom Seth in Mumbai.

"The country would have imported just 15 to 20 tonnes of gold in March as against 45 to 55 tonnes that is usually imported on a monthly basis,'' said Prithviraj Kothari, president of the Bombay Bullion Association. He added that the high price of the precious metal also deterred fresh purchases.

Gold Bullion imports shrank to 90 tonnes in the January-March 2012 period, as against 283 tonnes in the corresponding quarter of last year. In January, 40 tonnes of gold was imported, while in February around 30 tonnes was imported. The jewelers' strike and the import hike in March depressed demand further.

Imports of Silver Bullion were also substantially dlower in March at an estimated 20 tonnes. Silver imports during the same three-month period last year is estimated at 300-400 tonnes. In 2011, almost 4,874 tonnes of silver were imported into the country.

In January, the government hiked the gold import duty from 1% to 2%. Again in March, import duty was doubled to 4%. Speaking about the decline in imports, jewelers said high interest rates and inflation were also affecting consumption of the precious metals.

Puran Doshi of the Mumbai Wholesale Gold Jewellers Association said, "Though March is a lean period for the jewelry business, this year there were important festivals like Gudi Padwa and Ugadi. The spring festival too was celebrated in different parts of the country. These times are considered auspicious for purchasing gold, but due to the strike sales did not happen and jewelers have incurred a huge loss.''

He added that second quarter purchases would also fall to 150 tonnes from the 250 tonnes imported in the corresponding quarter. Given the current conditions, traders said overall gold imports in 2012 would not cross the 500 tonnes mark. India imported 969 tonnes of gold in 2011.

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Founded in 1999 as part of the Johannesburg-listed MoneyWeb media group, Mineweb is one of the world's leading sources of mining and metals-investment news, comment and analysis. Managed since 2003 by professional mining engineer Lawrence Williams – formerly of Mining Journal, and with more than 30 years' technical and financial experience in the sector – MineWeb provides thorough, international coverage of the natural resources industry.

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