Gold imports seen at lowest level in 2 yrs as duties pinch

Shipments could drop to 655 tonne in 2012 after imports were broadly flat at a record 969 tonne in 2011, according to the median of a poll of 10 respondents, which included importers, jewellers and brokerages.

“The initial reaction from the market is not good. Doubling of duty within three months is heavy for consumers to digest,” said Pinakin Vyas, assistant vice-president with IndusInd Bank, a large gold importer.

Vyas expects a 30% fall in imports in 2012. Imports were at 535.88 tonne in 2009 due to high supplies of recycled gold as investors cashed in on a 22% rise in prices.

The government’s budget last week doubled the import duty and imposed a levy on unbranded jewellery as measures to limit the current account deficit.

Jewellers in India, many of whom sell individual, tailor-made items in tiny market stalls, have shut shop for 10 days so far and plan to extend their strike over the duty. The finance minister has refused to change plans.

Gold demand in India had already faltered due to a rally in global gold prices. Gold spot prices touched their highest level for this year at the end of February at around $1,790 per ounce.

“Last year we had good imports but looking at the pace of the fall so

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