India's gold jewellery exports fall for 10th month in January

Written by PTI | New Delhi | Updated: Feb 18 2014, 03:08am hrs
Gold jewelleryIndia's gold jewellery exports from April to January fell 49.5 percent to $5.5 billion.
Gold jewellery exports continued to dive in January, the tenth consecutive monthly fall, with outbound shipments dropping 23 per cent to Rs 2,993 crore.

Besides, gold jewellery exports from April to January fell 44.42 per cent to Rs 33,178 crore from Rs 59,693 crore from the corresponding period of the previous fiscal.

High gold import was one of the major reasons for India's record CAD of USD 88 billion in the last fiscal, which in turn was putting pressure on value of rupee.

In the first two months of the current fiscal, gold imports had crossed 300 tonne.

To restrict the gold imports, the government raised the customs duty thrice to 10 per cent in 2013.

The Reserve Bank too imposed several restrictions, including linking the gold import to exports.

This financial year, the CAD is likely to be contained at USD 45 billion. The exchange rate too has stabilised.

India's gold jewellery exports continue to fall in January

(Reuters) Indian exports of gold jewellery dropped in January for a tenth consecutive month, and are likely to fall further due to no sign of any government incentives to revive the sagging shipments.

India, which is fighting to reduce its current account deficit, has brought in measures to restrict imports of gold, its second-biggest import item by value after oil.

The measures include a rule that 20 percent of all gold shipped in must be re-exported as jewellery, making it difficult for domestic jewellers and even exporters to get supplies despite high premiums.

"In most of the ports, due to procedural delays gold is not available," said Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council (GJEPC).

Gold jewellery exports from April to January fell 49.5 percent to $5.5 billion, GJEPC said in a statement.

January shipments fell 32.8 percent from a year earlier to $482.2 million, it said.

Besides the 80/20 import rule, the federal government also levies a record 10 percent import duty on the yellow metal.

Gold imports fell to just 21 tonnes in November against a record 162 tonnes in May 2013.

"We are asking for primary requirements like a cut in import duty and removal of the 80/20 rule," said Parekh.

Analysts say the easing of the central bank's so-called 80/20 export rule will have more of an impact on boosting supply than a cut in the import duty.

The leader of India's ruling Congress party, Sonia Gandhi, has asked the government to review the tough import restrictions on gold, local media reported on Jan. 23.

The finance ministry said later that India will review the curbs by the end of March, which coincides with the end of India's fiscal year.

On Friday, due to speculation of a cut in import duty this week, premiums fell 17 percent to their lowest point in more than four months as buyers postponed purchases.

However, the finance minister on Monday did not announce any relaxation of import curbs while presenting the interim budget.