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

Could Nemtsov Threaten Putin in Death as in Life?

Dynamic and debonair opposition leader had supported liberal economic reforms, criticized Russian president's aggression in Ukraine More

Oil Smuggling Highlights Challenges in Shutting Down IS Finances

Pentagon spokesman says Islamic State 'certainly continues to get revenue from the oil industry black market' but that airstrikes have made a dent More

India Focuses on Infrastructure, Investment to Propel Economy

Government expects economy to grow at 8 to 8.5 percent in next fiscal year More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Supreme Court Hears Hijab Discrimination Casei
X
Katherine Gypson
February 25, 2015 11:30 PM
The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video US Supreme Court Hears Hijab Discrimination Case

The U.S. Supreme Court has heard opening arguments in a workplace religious discrimination case that examines whether a clothing store can refuse to hire a young woman for wearing the headscarf she says is a symbol of her Muslim faith. Katherine Gypson reports from the Supreme Court.
Video

Video Falling Gas Prices Hurt Nascent Illinois Hydraulic Fracturing Industry

Falling oil prices are helping consumers purchase cheaper petroleum at the pump. But that’s made hydraulic fracturing or “fracking” less economically viable for the companies in the United States invested in the process. VOA’s Kane Farabaugh reports on one Midwestern town that was hoping to change its fortunes by cashing in on the next big U.S. oil boom.
Video

Video Fighting in Sudan's South Kordofan Fuels Mass Displacement

Heavy fighting in Sudan's South Kordofan state is causing hundreds of thousands to flee into uncertain conditions. Local aid organizations estimate as many as 400,000 civilians have been internally displaced since the conflict began more than three years ago, while another 250,000 have fled across the border to refugee camps in South Sudan. VOA's Adam Bailes reports.
Video

Video Lao Dam Project Runs Into Opposition

A Lao dam project on a section of the Mekong River is drawing opposition from local fishermen, international environmental groups and neighboring countries. VOA's Say Mony visited the region to investigate the concerns. Colin Lovett narrates.
Video

Video A Filmmaker Discovers Her Biracial Identity in "Little White Lie

Lacey Schwartz grew up in an upper middle-class Jewish family, in a town in upstate New York where almost everyone she knew was white. She assumed that she was, as well. Her recent documentary, Little White Lie, tells the story of how she uncovered the secret of her true racial background. VOA’s Carolyn Weaver has more on the film.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.
Video

Video US-Cuba Normalization Talks Resume Friday

Negotiations aimed at normalizing diplomatic relations between the U.S. and Cuba resume Friday. On the table: lifting a half-century trade embargo and easing banking and travel restrictions. There's opposition in Congress, but some analysts say there may be sufficient political and economic incentives in both nations for a potential breakthrough this year. VOA's Mil Arcega reports.
Video

Video Pakistan's Deadline For SIM Registration Has Cellphone Users Scrambling

Pakistani cell phone users have until midnight Thursday to register their SIM cards, or their service will be cut off. While some privacy experts worry about government intrusion, many Pakistanis are just worried about keeping their phone lines open. VOA Deewa reporter Arshad Muhmand has more from Peshawar.
Video

Video Myanmar Warns Factory Workers to End Strikes

Outside Myanmar's main city Yangon, thousands of workers walked off their jobs earlier this month demanding a doubling of their wages, pay raises after a year and input from labor unions on industrial regulations. Since Friday, the standoff has grown more tense as police moved in to disrupt the sit-ins, resulting in clashes that injured people from both sides. VOA correspondent Steve Herman visited industrial zones which have become a focus of Myanmar's fledgling workers rights movement.
Video

Video Oscar Winners Do More Than Thank the Academy

The Academy Awards presentation is Hollywood’s night to reward the best movies from the previous year. It’s typically a lot of glitter, a lot of thank you’s, a lot of speeches. But many of this year’s speeches carried messages beyond the thank you's. VOA’s Carolyn Presutti takes a look.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More

World Currencies

EUR
USD
0.8896
JPY
USD
119.26
GBP
USD
0.6475
CAD
USD
1.2451
INR
USD
61.816

Rates may not be current.