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Gold rush, again

Surge in bullion imports is a matter of concern

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India's Gold Imports

Business Standard Editorial Comment 

India’s gold imports in terms of quantity in the first half of 2017 crossed the entire imports of 2016. The country imported 510 tonnes of gold in 2016, while the imports in January-June 2017 were 521 tonnes. Imports could cross 900 tonnes this year against an average of 709 tonnes in the past five years, according to data compiled by GFMS Thomson Reuters. The import bill is expected to cross $40 billion this year, which will be the highest in value terms since 2012. There could be many reasons for this renewed focus on a traditional asset. Demonetisation made households wary about holding cash stashes and also temporarily suppressed gold demand. Also, low global prices have made gold look more tempting. The jewellery industry, too, stocked up ahead of the goods and services tax regime that kicked in on July 1. Speculation that the new tariff might be as much as 5 per cent for bullion traded locally, including for manufacturers buying from importers, had prompted a jump in imports to 126 tonnes in May. But much to the trade’s relief, the gold rate was eventually set at 3 per cent.

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First Published: Wed, July 12 2017. 22:45 IST
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