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India's Trade Deficit Misses 95% Drop in Gold Imports

Gold bullion imports to India fell much further than total trade deficit...
IMPORTS of gold bullion fell 95% by weight in August from July, local news reports said Tuesday.
The country's overall trade deficit, however, fell by much less – suggesting the gap between India's imports and exports, blamed for the sharp depreciation of its currency, the Rupee, continues to widen ex-bullion.
Confusing the picture, the Indian Express says official data show only 2.5 tonnes of gold bullion were imported to India during August. The Economic Times, in contrast, reports a value of $650m – nearer 14 tonnes at last month's average price.
That compared with $2.2 billion of gold bullion imports by value in July, the ET says.
In total, India's trade deficit shrank to $10.9bn in August from $12.26bn the month before, with imports dropping by $1.1bn but exports rising only $0.3bn.
The Rupee has dropped 20% against the US Dollar this year, driving India gold prices to new record highs even as the government raised import duties to 10% and the metal fell sharply on international markets.
"Rupee depreciation has a limited advantage," Reuters quotes R.Sethuraman, finance and corporate affairs director for Hyundai Motor India Ltd, "and that too only in the short term.
"Continuous depreciation will have a reverse impact on pricing in the export market and an adverse impact on input costs."
Hindu political groups in Kerala last week called on temples in the state to refuse a Reserve Bank of India survey asking how much gold they hold.
State president V.Muraleedharan of the Hindu nationalist BJP party urged temples to oppose the move, local press reports, claiming it was aimed at taking possession of gold bullion donated by worshippers.
Kerala's temples include Sree Padmanabhaswamy, where $22 billion in gold bullion and ornaments dating back up to 500 years was discovered in underground vaults in 2011
New import duties, meantime, imposed on television sets imported to India have caused a 75% drop in sales of TVs in the Gulf state of Qatar, according to the Press Trust of India.
"We have noticed a steep fall in the number of Indians travelling home with flat screen TVs," The Peninsular newspaper quotes a spokesman for Jet Airways.
Private-sector holdings of gold jewelry and bullion are estimated at perhaps 20,000 tonnes, around 1 ounce in every 8 ever mined in history.

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