Gold Market Looks For India To Relax Import Restrictions

The gold market continues to look for India to start relaxing some of the restrictions imposed on gold imports last year, says MKS (Switzerland) SA. The firm cites news that India's finance secretary, Arvind Mayaram, was quoted as saying a decision on relaxing the restrictions would be made only after the final fiscal-year current account deficit data is announced.

India's current account deficit narrowed significantly to a four-year low of $4.2 billion in the October-December quarter, aided by import restrictions that include a so-called 80-20 rule requiring 20% of all imported gold to be re-exported. The rules contributed to a 17.27% year-on-year decline in imports of gold and silver during March, MKS notes.

“There is a widespread expectation that the government will relax the curbs imposed on gold although Mayaram recently told CNBC that the government’s approach on lifting gold import curbs will be highly calibrated and cautious.”