India gold imports nosedived in March

By Anil Mathews (ScrapMonster Author)

April 07, 2016 07:54:19 AM

NEW DELHI (Scrap Monster): The preliminary data by the country’s Finance Ministry indicates that Indian gold imports nosedived during the month of March this year.

The provisional figures suggest that the gold imports during the month totaled just over 16 metric tonnes. This is significantly lower by 88% when compared with the imports during the same month a year before. The Indian gold imports had totaled 133 tons during March last year. Also, imports more than halved during the month when compared with the previous month. The country’s gold imports had totaled 36.9 tonnes during February this year.

During the full year ended March 2016, the country imported around 894 tonnes of gold, down from 1,133 tonnes imported during the fiscal prior to this.

The various measures implemented by the government have led to reduced appetite for gold among consumers in the country. One such measure was the re-introduction of local sales tax on gold jewellery after a gap of four years. The strike by domestic jewelers in protest against the excise tax has impacted flow of gold into the country. Also, March witnessed weaker demand for gold among customers, mainly on the back of higher gold prices. Incidentally, gold prices are up almost 15% since the start of the year 2016.

According to traders, the gold demand is expected to gain momentum during the first quarter (Apr-June ’16) of the current fiscal primarily on the back of increased demand during upcoming wedding and festival season. They also expect favorable action from the government to do away with the excise tax on gold jewelry.