India's August gold imports fell under 10 tonnes, inflows from scrap gold flourished

MUMBAI (Scrap Monster): The official gold imports by India had been at a standstill with virtually no imports recorded during the one and a half month period starting early July this year when the Reserve Bank of India (RBI) had come up with stricter regulations to arrest the inflow of gold into the country.

The trading houses had been awaiting clarification on certain procedural aspects including the 80:20 norm prescribed by the customs circular. The Customs notification categorically clarified that export certificates once issued, should be acceptable for all consignments. Currently, the exporter is forced to produce certificate for each consignment.

Following the clarification by the Indian Customs Department, jewellers have started placing orders for importing gold. With fresh purchase orders starting to flow in by August end, the total gold imports by the country during the month is estimated at less than 10 tonnes. According to Mr. Vipul Shah, Chairman, Gems and Jewellery Export Promotion Council (GJEPC), the gold imports by the country are estimated at around 20 to 25 tonnes during the month of September. As per the existing regulations, nearly 6 tonnes of it is expected to be re-exported.

According to GJEPC, when official gold imports were nil, it was the inflows from scrap gold that helped to fill the void. As per rough estimates, almost 20 to 25 tonnes of scrap gold flowed into the market during the month of August.  The sudden rise in gold price prompted investors to offload part of their gold reserves purchased at fairly inexpensive rates. Smuggled gold inflows too had been higher during the period. It was primarily the inflows from scrap gold that helped the business going for jewellers in the country.