India has banned free import of gold and silver and put them under the restricted category for imports, a move seen by the industry as a reaction to the sudden jump in gold imports in November.
Gold imports by India had risen by about 78 percent from a month earlier. Industry insiders had cited re-stocking by jewellers and traders post-Diwali sales for the massive jump last month.
UAE and Switzerland are among the major countries for import of refined gold for India. Ghana and Peru are the other source countries for India’s gold imports.
According to India’s Directorate General of Foreign Trade (DGFT) notification isued on Wednesday, import of gold in any form has been placed in “restricted” category from the “free” category.
“Import of gold in any form, other than monetary gold and silver in any form, is allowed only through nominated agencies as by Reserve Bank of India (RBI) in case of banks, and DGFT for other agencies,” the directorate said.
Monetary gold is gold to which the monetary authorities or others who are subject to the effective control of the monetary authorities, have title and is held as reserve assets.
The DGFT order, however, said import under advance authorisation and supplies of gold directly by the foreign buyers to exporters against orders have been exempted.
A representative of Indian Bullion and Jewellers Association (IBJA) told Arabian Business that the DGFT order will not affect normal business of gold bars and coins.
“The restriction will only affect those importers who were importing gold powder, wires, sheets, etc,” said Surendra Mehta, Secretary, IBJA.
Trade body officials had said that the November import rise was a one-off affair and gold imports were expected to come down to 40-45 tonne average in the subsequent months.
In value terms, gold imports rose by 6.59 percent to $2.94 billion in November from $2.76 billion a year-ago.
The rise in gold imports will lead to swelling of India’s import bill, which will have adverse impact on the country’s current account and fiscal deficits.
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