Sharp rise in gold, silver imports

Gold and silver imports have seen a sharp rise in September, showing a fivefold increase in the import bill of precious metals.

While gold imports have increased 450 per cent to $3.75 billion, silver import bill was up 225 per cent to $477 million. The total import bill reached $4.2 billion - up from $830 million in the same month last year. Even import of raw gold has gone up this year.

In September last year, gold imports had fallen significantly low, after the Reserve Bank of India imposed restrictions, fixing an import cap for the yellow metal at 12 tonnes. However, the imports have gone up to 90 tonnes in the last month.

Market insiders say increase in imports by star and premier trading houses was the main reason for the very high import bill. Silver imports have also increased, from 218 tonnes to 690 tonnes.

Several trading houses have increased gold imports, as they could easily export 20 per cent of the imported quantity after value addition, while the rest will be consumed by the domestic market, thanks to the festive demand. Besides, some banks, which were not so active in the previous months, have also imported gold.

Although banks, unlike star trading houses, don't export gold by themselves, the rule says banks, too, have to show that 20 per cent of the imported quantity is exported.