India’s Gold Demand Surges as Supply Declines

MUMBAI (Scrap Monster): Amidst high import duties, the gold demand in India likely to stay high in this year. Last year, India consumed 975 tons and it expects to be between 900 and 1,000 metric tons in 2014.

According to the World Council, last year, China overtook India as the biggest consumer of gold in the world and both countries seem to want more gold for further days.

As per the report, India’s current account deficit was narrowed by the stringent import restrictions over the last year whereas the gold smuggling increased, approximately 200 tons of gold. The customs department seized less than 1% of smuggled gold in the last year.        

According to the economists, India’s current account deficit would decline to less than $45 billion in the last financial year from $88 billion a year earlier.

It is said that because of the higher gold prices, the gold importers and jewelers struggle to meet their expenses to provide enough gold to the surging people’s demand.

Mr. Haresh Soni, chairman of All India Gems and Jewelry Trade Federation said that the jewelry owners expect the government would curb heavy import duties after the election procedures.