New Narendra Modi govt, import curbs removal to spark imports by 10-15 tonnes/month: GJF

PTI Posted online: Thursday, May 22, 2014 at 0000 hrs
New Delhi : Gold imports by India may increase by 10-15 tonnes per month following the latest relaxations by RBI, and emergence of stronger government under Narendra Modi.

Jewellers said prospects for the Indian rupee have improved after the poll results, which showed a stable government in the next term, and that has also led to overall swung in the market sentiment.

All India Gems and Jewellery Federation (GJF) Director Bacchraj Bamalwa said, "It seems gold import may increase in coming months by 10-15 tonnes per month as the mood in market is positive as new and stable government has emerged after the results and the latest relaxations by RBI."

Yesterday, the Reserve Bank of India (RBI) eased gold import norms by allowing select trading houses, in addition to already permitted banks, to procure the precious metal.

RBI, in July last year, had imposed severe restrictions on gold imports in order to check burgeoning current account deficit and sliding rupee.

The central bank had tied imports with exports and prescribed a 20:80 formula. This facility was available to select banks only and other entities were barred from importing the metal.

Under the 20:80 scheme an importer has to ensure that at least one-fifth, or 20 per cent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.

Welcoming the RBI step, GJF Chairman Haresh Soni has also said this is a positive step for the industry as the supply will increase. It will help in reducing the domestic gold prices as this smoothening of supply will help in reducing the premiums, which currently is ruling at USD 80-90 an ounce.