Gold imports to decline by 41% this year: MMTC chief

Gold is being sold at a high premium due to supply crunch following govt restrictions on imports

Gold imports are likely to decline by 41% to 500 tonnes this financial year on account of curbs imposed by government, a top MMTC official said today.

"Gold imports have come down so far. I think the country's overall imports would be 500 tonnes in 2013-14 as against 850 tonnes last year," state-run MMTC's Chairman and Managing Director D S Dhesi told PTI.

Around 400 tonnes have already been imported in the first six months of this fiscal, he said, adding that a maximum of another 100 tonnes would be imported this year.

Gold imports would be lower as there are government restriction on its in-bound shipments, the MMTC chief said. Sluggish demand due to high domestic prices compared to global rates is also a reason, he added.

Gold is being sold at a high premium due to supply crunch following government restrictions on imports, traders said.

India, the world's largest gold consumer, meets almost its entire demand through imports.

Dhesi said MMTC would cut volume of gold imports for domestic consumption and enhance supply for export units to boost shipments.

"We will import 30% less gold for local consumption. But we will import more to meet export demand. We are targeting to supply about 3,000 kg of gold to export units this fiscal, as against 2,200 kg last year," he said.

Dhesi also mentioned that the existing restrictions on gold imports are effective and there is no need for further tighten inbound shipments of gold

The Finance Ministry had directed MMTC to focus on supplying gold to export units. So far, 1,700 kg of gold has been supplied to these units, Dhesi said.

Government had raised import duty on gold to 10% from 8% to address widening current account deficit. Traders were also asked to export 20% of imported gold with value-addition. Besides, imports of coins and bares were banned.