India’s gold imports drop substantially in February

NEW DELHI (Scrap Monster): The latest report published Monday by news agency NewsRise Financial indicates substantial decline in gold imports by the country during the month of February this year.

The country’s gold imports totaled 36.9 tonnes in Feb ’16, significantly lower by 34% when compared with the imports during the same month a year before. On the other hand, the cumulative gold imports by the country during the first eleven months of the fiscal from April 2015 to February this year surged higher by 20.5% when matched with the corresponding 11-month period during previous fiscal.

The various measures implemented by the government have led to reduced appetite for gold among consumers in the country. The latest budget presented by the government had re-introduced local sales tax on gold jewellery after a gap of four years. At the same time, the government has not lowered the high import duty on gold. These two factors have led to the sharp drop in demand for gold in the country. Estimates indicate that Indian gold imports during the last quarter (Jan ’16 to Mar ’16) of the fiscal year FY '15-'16 may drop to the lowest levels since 2009. The imports during March are likely to drop considerably on account of strike by jewellers.

Meantime, the imports of gold by the state of Gujarat during the fiscal 2015-’16 has touched the lowest level in past six years. The imports dropped nearly 45% year-on-year from 152.24 MT in 2015-’15 to 83.84 MT in 2015-’16. The imports during the month of March ’16 alone dropped nearly 97% to just 0.54 MT, primarily on account of lack of demand due to strike by jewellers. The jewellers have been on an indefinite strike since March 2^nd protesting against the government decision to levy 1% excise duty on non-silver jewellery. The traders also blame volatile gold prices in international market for low imports.