News / Economy

    India Tries to Restrict Gold Imports

    FILE - An Indian model displays gold jewelry during a Jewelry and Gem Fair in Hyderabad, India.
    FILE - An Indian model displays gold jewelry during a Jewelry and Gem Fair in Hyderabad, India.
    Anjana Pasricha
    Amid a worrying economic slowdown, India is trying to reduce its massive gold imports this year to shore up its finances. Traders and experts said the country’s deep cultural attraction to gold is not likely to weaken.
      
    As gold shipments into India in June and July fell compared to the same period last year, Finance Minister P. Chidambaram sounded optimistic.
     
    He hoped that total imports of the yellow metal this year would add up to less than the 845 metric tons bought last year at a whopping cost of $50 billion.  

    The Finance Minister has been closely watching gold purchases, which are the second-biggest item in India’s import bill after crude oil. And the huge amount spent on importing the metal is depleting the country’s foreign exchange reserves and contributing to a worrying trade deficit.   

    The government has been struggling to moderate demand. It has doubled a tax on imports from four to eight percent this year and tightened rules for gold imports. But given India’s huge affinity for gold, experts are skeptical whether these measures will deter customers.   
       
    The head of the World Gold Council in Mumbai, Somasundaram Palamadai Ramaswamy, said restricting gold imports raises the risk of demand being met through unauthorized channels.
     
    “The demand is ingrained in the savings habit, the social habits, the buying habits of the country and where millions of people do this..…to try and curb this demand by limiting supply is not exactly gong to be helpful in the long run, it might actually drive the demand into the grey channel,” said Somasundaram Palamadai Ramaswamy.

    The World Gold Council said good monsoon rains this year are likely to raise incomes and increase purchases in the coming months, especially in rural areas where gold is a popular investment. And prices, which have fallen below last year’s levels, have only added to the metal’s allure.  

    Jewelers said business has been slack in the last two months, but they point out that summer is usually the off season for gold sales.

    They said the real test of whether India has reduced its appetite for gold will be known during the festival and wedding season, which begins in October. Giving jewelry to brides is an age-old Indian custom.

    Rajendra Bhola has a jewelry shop at the glittering Gold Souk in Gurgaon, an affluent business hub near Delhi. “Most of these people are buying for their daughter’s wedding which is their primary need," he said. "Whatever you say, it is part of their culture, it is part of their tradition and they have to buy it. You can’t change your culture overnight.”

    But as India’s passion for gold deepens its economic woes, the government has made several appeals to people to reduce purchases. Economists said reducing gold imports could wipe out billions of dollars from the country’s trade deficit and strengthen the falling rupee.

    You May Like

    Vietnam Mulls Tough Measures for ‘Misbehaving’ Chinese Tourists

    Move comes after footage surfaced online of Chinese travelers harassing a banana hawker in Da Nang

    Pakistan Social Media Star's Honor Killing Fuels Debate

    Qandeel Baloch's murder puts spotlight on deadly tradition and other mistreatment of women

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Wall Already Runs Along Parts of US-Mexico Borderi
    X
    July 22, 2016 12:30 AM
    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video Wall Already Runs Along Parts of US-Mexico Border

    The Republican Party’s presidential nominee, Donald Trump, gained the support of many voters by saying he would build a wall to keep undocumented immigrants and drugs from coming across the border from Mexico. Critics have called his idea impractical and offensive to Mexico, while supporters say such a bold approach is needed to control the border. VOA’s Greg Flakus has more from the border town of Nogales, Arizona.
    Video

    Video New HIV Tests Emphasize Rapid Results

    As the global fight against AIDS intensifies, activists have placed increasing importance on getting people to know their HIV status. Some companies are developing new HIV testing methods designed to be quick, easy and accurate. Thuso Khumalo looks at the latest methods, presented at the International AIDS conference in Durban, South Africa.
    Video

    Video African Youth with HIV Urge More Support

    HIV, the virus that causes AIDS, is the top killer of teens in sub-Saharan Africa. But many youths say their experience with the virus is unique and needs to be addressed differently than the adult epidemic. VOA South African Correspondent Anita Powell reports.
    Video

    Video Poor Residents in Cleveland Not Feeling High Hopes of Republican Convention

    With the Republican Party's National Convention underway in Cleveland, Ohio, delegates and visitors are gathered in the host city's downtown - waiting to hear from the party's presidential candidate, Donald Trump. But a few kilometers from the convention's venue, Cleveland's poorest residents are not convinced Trump or his policies will make a difference in their lives. VOA's Ramon Taylor spoke with some of these residents as well as some of the Republican delegates and filed this report.
    Video

    Video Pop-Up Art Comes to Your Living Room, Backyard and Elsewhere

    Around the world, independent artists and musicians wrestle with a common problem: where to exhibit or perform? Traditional spaces such as museums and galleries are reserved for bigger names, and renting a space is not feasible for many. Enter ArtsUp, which connects artists with venue owners. Whether it’s a living room, restaurant, office or even a boat, pop-up events are bringing music and art to unexpected places. Tina Trinh has more.
    Video

    Video With Yosemite as Backdrop, Obama Praises National Parks

    Last month, President Barack Obama and his family visited some of the most beautiful national parks in the U.S. Using the majestic backdrop of a towering waterfall in California's Yosemite National Park, Obama praised the national park system which celebrates its 100th anniversary this year. He talked about the importance of America’s “national treasures” and the need to protect them from climate change and other threats. VOA’s Julie Taboh reports.
    Video

    Video Counter-Islamic State Coalition Plots Next Steps

    As momentum shifts against Islamic State in Iraq, discussions are taking place about the next steps for driving the terrorist group from its final strongholds. Secretary of State John Kerry is hosting a counter-IS meeting at the State Department, a day after defense ministers from more than 30 countries reviewed and agreed upon a course of action. VOA Pentagon correspondent Carla Babb reports.
    Video

    Video Russia's Participation at Brazil Olympic Games Still In Question

    The International Olympic Committee has delayed a decision on whether to ban all Russian teams from competing in next month's Olympic Games in Brazil over allegations of an elaborate doping scheme. The World Anti-Doping Agency recently released an independent report alleging widespread doping by Russian athletes at the 2014 Winter Olympics in Sochi. So far, only Russian track and field athletes have been barred from the Summer Games in Brazil. VOA's Zlatica Hoke has more.
    Video

    Video Scotland’s Booming Whisky Industry Fears Brexit Hangover

    After Britain’s vote to leave the European Union, Scotland’s government wants to break away from the United Kingdom – fearing the nation’s exports are at risk. Among the biggest of these is whisky. Henry Ridgwell reports on a time of turmoil for those involved in the ancient art of distilling Scotland’s most famous product.
    Video

    Video Millennials Could Determine Who Wins Race to White House

    With only four months to go until Americans elect a new president, one group of voters is getting a lot more attention these days: those ages 18 to 35, a generation known as millennials. It’s a demographic that some analysts say could have the power to decide the 2016 election. But a lot depends on whether they actually turn out to vote. VOA’s Alexa Lamanna reports.
    Video

    Video Number of Syrian Refugees Arriving in US Jumps

    The United States is committed to resettling 85,000 refugees from around the world by October. Of that number, 10,000 will come from Syria and already some 4,000 Syrian refugees have arrived in the United States, many of them settling in the state of Illinois. As VOA’s Kane Farabaugh reports from Chicago, their arrival is not the end of a difficult journey to find peace and stability.
    Video

    Video Rio’s Trams Await Olympic Tourists

    Over the past century, many cities around the world replaced electric trams, prone to breakdowns and backups, with faster and more spacious buses. But for some reason restored antique trams are a huge tourist attraction. So it’s no wonder the authorities in Rio de Janeiro are busy restoring their city’s old tram line ahead of the Summer Olympic Games. VOA’ George Putic reports.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.9079
    JPY
    USD
    106.10
    GBP
    USD
    0.7636
    CAD
    USD
    1.3106
    INR
    USD
    67.076

    Rates may not be current.