According to industry sources, the imports of the ‘yellow metal’ would be around 500 tons against the 650-700 ton, estimated this year. “We are expecting gold imports to decline by 20-30 per cent to around 500 ton in 2014, from around 650-700 ton estimated this year,” All India Gems and Jewellery Trade Federation (GJF) director Bachhraj Bamalwa said.
One of the main reasons for this decline is the huge price differential between international and domestic market, which is about 22 per cent higher here, he said. “While global bullion prices are trading way below at $ 1,250 an ounce, from their 2012 highs of $ 1,908 per ounce in August 22, 2011, back here it is still ruling nearly steady at Rs 31,000 per 10 grams. The differences are mainly due to the Customs duty, local taxes and premiums,” he said. This year, he said, gold imports are likely to be at around 650-700 tonne.
The government has raised the import duty to 10 per cent and tied imports for domestic consumption to exports to curb Current Account Deficit (CAD) - the difference between outflows and inflows of foreign exchange.