Rediff.com » Business
Gold traders urged to curb sale of coins
By Meenakshi Sharma
November 19, 2014 17:35 IST
India's largest gems and jewellery federation has proposed its members curb sales of gold coins and bars in an effort to prevent the government from imposing import restrictions on gold after an increase in inbound shipments.
India, the world's second-largest gold buyer, is likely to announce some new measures to rein in gold imports which might include restrictions on a group of private trading firms.
Officials from the finance ministry and Reserve Bank of India (RBI) were considering whether to reimpose import restrictions on "star trading houses" that were eased earlier this year, a source said this week.
Sales of gold coins and bars should be curbed after reaching around 300 tonnes, All India Gems and Jewellery Trade Federation (GJF) said in a statement on Wednesday.
"The federation has estimated total imports in 2014 at about 850 tonnes of which the demand for coins/bars would remain around 200-250 tonnes," said Bachhraj Bamalwa, director GJF.
The federation had requested a curb on sales of gold coins and bars a year ago, when total imports were around 900
tonnes.
Bamalwa is expecting gold imports in October to be around 108 tonnes as compared with 95 tonnes a month earlier.
Gold imports in October jumped fourfold from a year earlier to $4.18 billion, raising concern about India's fragile balance of payments.
"The gold, which is being imported is purely used for manufacturing jewellery and not for investment purposes," said GJF chairman Haresh Soni.
Jewellery demand in India surged 60 percent in the third quarter, but investment demand eased 10 per cent, according to the World Gold Council.
Struggling with a high trade deficit, India last year raised its gold import duty to a record 10 per cent and made it mandatory to export a fifth of all bullion imports.
The trade body has also urged the government to reduce the duty on gold to 2 per cent to make smuggling unprofitable.
The World Gold Council has estimated about 200 tonnes of gold will be smuggled into India in 2014, versus 150-200 tonnes last year.
Source:
REUTERS© Copyright 2024 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Recommended by Rediff.com
Gold sales rise 20% during Diwali
Indian markets may outperform in case of slowdown: UBS
'Round tripping of jewellery on the rise '
More curbs on gold imports likely in 2 days
India regains top gold consumer slot
© 2024 Rediff.com