Gold imports by India gained more than four-fold in April driven by jewelers restocking in anticipation of a recovery in sales during the wedding season that will last till mid-June. Shipments rose to 98.3 metric tons last month from 22.2 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the data aren’t public. Imports were affected a year earlier because of a strike by jewelers to protest an excise tax on jewelery made and sold locally. Finance Ministry spokesman D. S. Malik declined to comment on the data.
Indian demand recovered this year as cash supply improved following measures taken by the government to curb unaccounted-for money, a move labeled as demonetization. Annual purchases may be at the higher end of an estimated range of 650 tons to 750 tons in 2017, according to the World Gold Council. Sales during the auspicious gold buying day of Akshaya Tritiya at the end of April were about 5 percent higher than last year, Sreedhar G. V., managing director at Sree Rama Jewels, said.
“After demonetization, the entire country was at a standstill,” Sreedhar, a former chairman of the All India Gems & Jewellery Trade Federation, said by phone from Bengaluru. “Now since the money flow has started and gold prices have also come down, there has been good demand in the market.”
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Cash transactions for gold purchases have declined to about 50 percent, down from 80 percent, in many cities as more and more people are paying by cards and this is a positive sign for the trade, he said.
Opportunistic purchasing by investors, an increase in restocking and forecasts for a normal monsoon probably mean healthy demand for gold in the first half, P.R. Somasundaram, managing director for the council in India, said on May 3. However, the uniform goods and services tax expected to be implemented from July may interrupt this trend, he said.
In the financial year ended Mar. 31, imports dropped 20 percent to 716.4 tons, according to the finance ministry official. Indians buy gold during festivals and for marriages as part of the bridal trousseau or as gifts, and the nation imports almost all the gold it consumes.