'Surge in gold imports a seasonal impact'

Deepak Kumar | The Dollar Business 

  India’s gold imports shot up 179% to $3.8 billion in December, mainly driven by a huge decline in the global gold prices and the ongoing festive season in India. Imports of the yellow metal n December were the highest since August when India imported gold worth $4.95 billion. In December 2014, the accumulative imports stood at $1.36 billion. During April-December 2015-16, total imports increased to $26.45 billion compared to $25.85 billion during the same period of 2014-15, according to the latest government data. In addition to the falling gold prices in domestic as well as global markets, the ongoing festive season, as the industry analysts feel, has also been responsible for a sudden surge in imports of the precious metal. “Gold sees seasonal buying. Around Makar Sakranti, marriage season (from February to May) starts in India. So, buying goes up in anticipation that domestic sales might go up. It’s just a temporary phase. After the season, imports will slack again,” Ketan Shroff, spokesperson of the India Bullion and Jewellers Association Ltd. (IBJA), told The Dollar Business. Referring to the Gold Monetisation Scheme, which was launched by the government last year to reduce India’s dependence on gold imports to meet its domestic demand, Shroff said it’s very early to comment on this. But this scheme is definitely going to help the industry. “We have proposed to the government that we may open up 1,000 centres by swapping the metal with coins. If investors want to invest, they can swap it at our centres. So, we are trying to work closely with the government to extract stacked gold, and that should cut down on gold imports in the long run,” Shroff said. India imported about 850 tonnes of gold during January-September 2015 as against 650 tonnes during the corresponding period of 2014. The industry has also discussed with the government the issue of high import duty on the yellow metal.  

January 19, 2016 | 1:40pm IST