Gold import duty hike won't impact demand much: Titan Inds

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Gold import duty hike won't impact demand much: Titan Inds

Yesterday, the government changed the import duty on gold to two percent of value from the earlier flat Rs 300 per 10 grams. Bhaskar Bhat, managing director of Titan Industries says, this is not going to impact demand much.

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Yesterday, the government changed the import duty on gold to two percent of value from the earlier flat Rs 300 per 10 grams.

In an interview to CNBC-TV18, Bhaskar Bhat, managing director of Titan Industries says, this is not going to impact demand much. "It is a small increase, Rs 25 increase per gram," he adds.

According to him, the volume sluggishness was visible during Q3. "Volatility in gold has impacted consumer sentiment," he adds.

He further says, decline in grammage seen in Q3 is arrested now.

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: How have you read the news of this import duty on gold being increased both in terms of what it increases your cost by and whether it is going to further going to crimp demand and volumes?

A: It is a small increase, Rs 25 increase per gram. Customers have paid much higher prices over the year because of the global increase in the price of gold. And if the government has restructured the duty from a rupee to a percentage of the import price, that is fair enough. They are going to collect more taxes and consumers have been paying.

This is not going to impact demand so much as the larger increase which has happened over the last 12 months or so. In fact it's the volatility which keeps the consumers back, not so much by way of increase only.

Q: What is jewellery demand generally right now? Would you classify demand that is sluggish and even this small increment increases might add to a general sluggish environment?

A: I think the sluggishness was visible during Q3- October-December quarter. Now, market and consumers are looking forward to the wedding season. So, it is not as sluggish as it was at that time. Certainly, this specific Rs 25 increase is not going to impact demand, the sluggishness maybe on account of other reasons. Right now, atleast the decline in grammage, which was happening in Q3, has been stemmed.

Q: How is the watch market holding out, any signs of strain out there?

A: No. I feel that the so called slowdown might have bottomed out. We are not seeing any significant drop in this quarter, atleast January is doing reasonably okay.