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Gold import in India is estimated by some to have risen sharply in November on rising consumer demand, ahead of the wedding and festive season.
Quoting a senior finance ministry official, news agency NewsRise estimated the import at 200 tonnes in November, from initial data collated by the customs department. The official argued the sudden spike could be in anticipation of tightening import norms.
However, trade sources Business Standard spoke to estimated gold import at 100-125 tonnes in November.
“Banks contributes 20-25 per cent of India’s overall gold import. Indications from there show no drastic change in gold import in November from October. There is no spike in demand,” said Rajan Venkatesh, managing director (India bullion), ScotiaMocatta, a part of Scotiabank Global Banking and Markets.
Gold import in October was estimated at 120 tonnes, a steep rise from 95 tonnes in September.
“Bullion import for domestic consumption should be 70-80 tonnes. Adding 20 per cent for jewellery exporters under the 80:20 scheme (recently ended, under which at least a fifth of imported gold was to be supplied to jewellery exporters), the total quantity works out to 100 tonnes. Even in case of exaggeration, total gold import should be 125 tonnes, not more,” said Rajesh Mehta, managing director of Rajesh Exports, one of the largest among gold jewellery exporters.
The Reserve Bank of India reported the country’s current account deficit (CAD) at $10.1 bn or 2.1 per cent of the gross domestic product in the second quarter (Q2) of the current financial year ending September, as compared to $5.2 bn (1.2 per cent of GDP) for July-September 2013. It said a sharp rise in gold import was an important reason.
Arun Jaitley, the Union finance minister, has said the CAD is in a comfortable zone but the government was watching the gold import flow.
Data collated by the commerce ministry showed India’s gold import jumped 95 per cent to $7.6 bn in Q2 from $3.8 bn in the same quarter last year. The rise had continued in October, reaching $4.2 bn from $1.1 bn in October 2013.
Trade sources estimated gold import at $4-4.5 bn in November, translating to 100-125 tonnes.
While announcing the July–September quarter data of the trend in demand, Somasundaram PR, the India managing director of the World Gold Council, had estimated an increase in gold import in December quarter.
Overall, gold import in 2014, however, is estimated to turn out lower than in 2013, which saw 825 tonnes. the September quarter import was 204 tonnes, as against 202 tonnes in the June quarter and a mere 91 tonnes in the September quarter of 2013. Last year, the government introduced the 80:20 scheme to curb these imports.
Standard gold jumped a little over two per cent or Rs 550 to Rs 27,250 per 10g at Zaveri Bazaar here, following a three per cent rise to $1,230 in its prices in the international market late Tuesday evening. Silver moved up by Rs 1,250 to Rs 38,700 a kg.
