India's annual gold imports must be restricted to 700 tonnes : ASSOCHAM

Gold  |  2013-06-11 06:13:05   |   By

The annual gold imports by the country must be restricted to 700 tonnes, states the Associated Chambers of Commerce and Industry of India (ASSOCHAM)

NEW DELHI (Scrap Monster) : The annual gold imports by the country  must be restricted to 700 tonnes, states the Associated Chambers of Commerce and Industry of India (ASSOCHAM), responding  to the series of measures taken by the Indian Government and the Reserve Bank of India (RBI ) to rein in gold imports.

The industry body observed that the recent surge in gold imports was mainly attributed by the sudden fall in gold prices. The shift in US investor sentiment was countered by a surge in physical buying, especially by Asian countries like India and China. The gold imports by the country saw a sharp rise of 14% from 142.5 tonnes in April to 162 tonnes in May this year.

The string of regulatory policies announced recently is expected to curtail the gold imports significantly. If the predictions of All India Gems and Jewellery Trade Federation are anything to go by, the gold imports may fall by 20% in 2013.

Gold prices have failed to bottom out, with fears of further breakdown looming large. The prices are forecast to remain range bound. A moderate stability in gold prices would bring down its demand.

According to ASSOCHAM, restricting gold imports can save the country from the deteriorating current account deficit (CAD). The country’s premier apex chamber also stated that it do share the concerns of the Government in the midst of reports that the trade deficit of the country may widen to record highs of $21 billion in May, despite the whole raft of decisions announced recently.