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

Arrested Football Officials Come Mainly From the Americas

US Justice Department alleges defendants participated in 24-year scheme to enrich themselves through corruption of international soccer More

Video Kenyans Lament Al-Shabab's Recruitment of Youths

VOA travels to Isiolo, where residents share their fears, struggles to get loved ones back from Somalia-based militant group More

This US Epidemic Keeps Getting Worse

One in 4 Americans suffers from this condition More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensionsi
X
May 26, 2015 11:11 PM
When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video US-led Coalition Gives Some Weapons to Iraqi Troops

In a video released Tuesday from the Iraqi Ministry of Defense, Iraqi forces and U.S.-led coalition troops survey a cache of weapons supplied to help Iraq liberate Mosul from Islamic State group. According to a statement provided with the video, the ministry and the U.S.-led coaltion troops have started ''supplying the 16th army division with medium and light weapons in preparation to liberate Mosul and nearby areas from Da'esh (Arabic acronym for Islamic State group).''
Video

Video Amnesty International: 'Overwhelming Evidence' of War Crimes in Ukraine

Human rights group Amnesty International says there is overwhelming evidence of ongoing war crimes in Ukraine, despite a tentative cease-fire with pro-Russian rebels. Researchers interviewed more than 30 prisoners from both sides of the conflict and all but one said they were tortured. Henry Ridgwell reports for VOA from London.
Video

Video Washington Parade Honors Those Killed Serving in US Military

Every year, on the last Monday in the month of May, millions of Americans honor the memories of those killed while serving in the armed forces. Memorial Day is a tradition that dates back to the 19th Century. While many people celebrate the federal holiday with a barbecue and a day off from work, for those who’ve served in the military, it’s a special day to remember those who made the ultimate sacrifice. Arash Arabasadi reports for VOA from Washington.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Rolling Thunder Run Reveals Changed Attitudes Towards Vietnam War

For many US war veterans, the Memorial Day holiday is an opportunity to look back at a divisive conflict in the nation’s history and to remember those who did not make it home.
Video

Video Female American Soldiers: Healing Through Filmmaking

According to the United States Defense Department, there are more than 200-thousand women serving in the U.S. Armed Forces.  Like their male counterparts, females have experiences that can be very traumatic.  VOA's Bernard Shusman tells us about a program that is helping some American women in the military heal through filmmaking.

VOA Blogs

World Currencies

EUR
USD
0.9152
JPY
USD
122.70
GBP
USD
0.6494
CAD
USD
1.2374
INR
USD
63.925

Rates may not be current.