News / Economy

India Holds Off on Gold Imports

A saleswoman arranges a gold necklace inside a jewellery showroom in the southern Indian city of Kochi, April 16, 2013.
A saleswoman arranges a gold necklace inside a jewellery showroom in the southern Indian city of Kochi, April 16, 2013.
Reuters
— India's imports of gold have halted since July 22, sending premiums for scarce stocks soaring, as traders in the world's biggest bullion buyer try to puzzle out new central bank rules that tie imports to export volumes.

In its battle to rein in a record trade deficit, India has targeted gold, the second-biggest item in its import bill after crude oil.

India doubled its import duty to 8 percent from the 4 percent where it stood at the beginning of the year, and also requires a fifth of all gold imports to be used for export, usually in the form of jewelry.

June imports fell nearly 81 percent to 31.5 tons from a May record of 162 tons, although Finance Minister P Chidambaram said on Monday imports had risen again in July, but without giving any details.

"There have been no imports since July 22 [the day of the central bank announcement] due to these restrictions," Bachhraj Bamalwa, director of trade body the All India Gems and Jewelry Trade Federation, told Reuters.

Imports in July could have reached 45 to 55 tons, he said, implying that demand remains strong. "Premiums are increasing as there is no gold available," he added.

Traders were quoting a premium of up to $45 an ounce over London spot prices on Tuesday, up from $25 to $30 in the previous session.

"No one in India is able to import for now, due to the new regulations and a lack of clarity on the operational procedures," one trader in Singapore said.

The confusion over the new rules and procedures could cut imports by 60 percent, according to estimates by the Federation, just ahead of the peak wedding and festival season that usually kicks off around the middle of August.

Waiting for guidelines

Industry officials said import agencies were waiting for guidelines from Indian customs on clearing shipments through warehouses and the new export-linked policy on imports.

In the new scheme, importing banks and agencies have to ensure that the requirement for re-exports is met.

"The notification requires a lot of clarifications," said an official with a private bullion importing bank, who did not want to be identified because he was not authorized to speak to the media. "No bank has started importing [after the Reserve Bank of India's order]."

Dealers are not ready to import gold and store it, he added, with only imports for immediate sale expected to take place at the moment.

A Singapore-based trader with an international bank that has stopped shipping to India said the new guidelines and the central bank's flip-flop on a rule that had forced only cash deals for imports were sending mixed signals.

In May, India's central bank restricted the import of gold on a consignment, or credit, basis by banks, only to backtrack two months later.

"We don't want our stock to get stuck there. So we would rather stay put at this stage," the trader said.

You May Like

EU Court Fines Poland for Hosting CIA 'Black Sites'

Ruling is first time a court has acknowledged suspects were held and tortured at the sites, under US program launched following the 9/11 terrorist attacks More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

Video At AIDS Conference, Prevention Pill Stirs Excitement

Truveda shows promise, spurring debate over access and other approaches More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Israel Targets Gaza Supply Tunnelsi
X
July 24, 2014 4:42 AM
The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video MH17's 'Black Boxes' Could Reveal Crash Details

The government of Malaysia now has custody of the cockpit voice and flight data recorders from Malaysia Airlines Flight 17, which was hit by a missile over Ukraine before crashing last week. As VOA's Carolyn Presutti reports, the so-called black boxes may hold information about the final minutes of the flight.
Video

Video Living in the Shadows Panel Discussion

Following a screening of the new VOA documentary, "AIDS - Living in the Shadows," at the World AIDS conference in Melbourne, a panel discussed the film and how to combat the stigma associated with HIV/AIDS.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video US Awards Medal of Honor for Heroics in Bloodiest of Afghan Battles

U.S. combat troops are withdrawing from Afghanistan, on pace to leave the country by the end of this year. But on Monday, U.S. President Barack Obama took time to honor a soldier whose actions while under fire in Afghanistan earned him the Medal of Honor. VOA's Jeff Seldin has more from the Pentagon.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.