Gold imports during the second quarter of 2012 stood at 131 tonnes, according to the World Gold Council. Last week, the government increased import duty on gold to eight percent, the second such hike within six months to put a check on gold imports.
The various measures taken by the government to curb gold imports are not likely to reduce demand for the precious metal, the Bombay Bullion Association today said.
"The government's policies to curb bullion import are not going to affect demand... imports will continue and will remain similar to last year during this quarter," BBA president Mohit Kamboj told reporters.
Gold imports during the second quarter of 2012 stood at 131 tonnes, according to the World Gold Council. Last week, the government increased import duty on gold to eight percent, the second such hike within six months to put a check on gold imports. He said if the government is serious about curbing imports, it should restrict private players who account for about 60-70 percent of the total imports.
The government agencies and banks import 30-40 percent of the total gold, he said, adding that BBA has written a letter in this regard to the Finance Ministry. There is also 20-25 percent increase in scrap over the last six months mainly on account of rise in raw gold (dore bar)for the refinery, he said. The BBA is also working on price pulling mechanism for Mumbai, in which all traders who are members can participate.
"Every bullion dealer sells at a different price depending on his stocks and the demand and supply scenario. With the price pulling mechanism, we are trying to arrive at uniform price in the city for our members," he said. The monthly gold imports have averaged 152 tonnes in first two months of the fiscal as compared to an average of 70 tonnes seen in the 2012-13 financial year. High gold imports is one of main reasons behind high Current Account Deficit, which touched a record high of 6.7 percent of GDP in December quarter of last fiscal. The CAD is likely to be in the range of 5 percent for the 2012-13 fiscal. As the demand for gold remains as strong as before, there has also been a significant increase in smuggled gold, Khamboj said.