India’s Gold Imports Lowest Since 2003

goldMumbai: With the government giving a push to digital transactions following demonetisation and discouraging the purchase of assets using cash, some trends expected to change the gold business have been identified, reports Business Standard.

The immediate impact of demonetisation has been on gold demand, which went up sharply after the withdrawal of the 500- and 1000-rupee notes on November 8. While the demand for gold increased immediately after demonetisation, it fell sharply in December.  Now for buying jewellery or bullion worth more than Rs. 2 lakh, purchasers have to state their permanent account number (PAN). ”It would not be surprising to see the government stipulating that jewellery purchases of over Rs. 20,000 ($300) should be supported by a government-authorised identification,” said an analyst who tracks Asian gold markets.

The import of gold in 2016 in tonnage terms has been the lowest since 2003, according to the GFMS TR. The organisation has estimated the official gold import in 2016 at 492 tonnes, a large part of that being for export.

The customs duty from gold import could be approximately Rs 8,000 crore, about less than half of what was collected a year ago. The low revenue also leaves room for cutting the import duty on gold to bring it in alignment with the proposed goods and services tax (GST), whose rate could be 4-6 per cent.