Gold import duty hike fear made India buy 15% more in January

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SummaryIndia's import of gold may have risen by 15 per cent to 75 tonne in January.

India's import of gold may have risen by 15 per cent to 75 tonne in January as bullion traders purchased more of the precious metal in anticipation of hike in customs duty.

On January 21, the government had raised import duty on gold and platinum to 6 per cent from 4 per cent with immediate effect in order to curb imports of the precious metals so as to check the widening current account deficit.

However, Finance Minister P Chidambaram had indicated measures to curb gold import at the beginning of the month.

"Gold imports are likely to be higher this month. On January 2, the Finance Minister had said the government will take measures to bring down imports. This led traders to buy more gold before the duty was announced," All India Gems & Jewellery Trade Federation Chairman Bachhraj Bamalwa said.

Asked about the quantity of gold import in the current

month, he said, "Imports will be around 75 tonne as compared with 65 tonne in January 2012."

After the hike, Bamalwa noted that quantity of gold imports have been very less. But the shipments would improve in the next month because of 'wedding season', he added.

In 2012, India's gold imports are estimated to have declined to 750 tonnes from 969 tonnes in the previous year, Bamalwa said, adding that the figures are yet to be finalised.

On gold prices, he said: "Domestic rates have increased after the import duty hike. The increase has not been felt due to rupee appreciation and a decline in international price by USD 35 an ounce in last one week."

Going forward, prices will be under pressure as clearance of gold futures in the domestic and global exchanges are happening simultaneously, Bamalwa added.

Gold prices in the national capital fell by Rs 15 to Rs 31,085 per 10 grams. Prices have come down by Rs 285 in the last two trading sessions. In the international market, gold prices remained almost stable at 1,657.31 dollar an ounce.

India is the world's largest importer of gold and biggest consumer of gold jewellery.

The government is concerned about growing current account deficit. In 2011-12 fiscal, the country imported gold worth USD 56.5 billion, while in the first nine months of this fiscal, imports are estimated at USD 38 billion.

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