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.
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

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs

World Currencies


Rates may not be current.