‘Indian gold imports may have jumped in March from around 25 tonnes in February, after the Reserve Bank of India allowed more private banks to ship the metal, triggering a correction in premiums,’ stated the Gems and Jewellery Trade Federation.
In mid-March, the Central Bank allowed five more private banks including HDFC Bank and Axis Bank to import the metal. “All the five banks have a good presence across India and hence the availability factor will improve greatly. March imports are estimated to be on a higher side compared to February,” said HareshSoni, Chairman of All India Gems and Jewellery Trade Federation (GJF). ‘As a result, premiums have fallen 85 per cent to $25-30 an ounce on London prices, from a peak of $160 in December 2013,’ added further. He declined to give an estimate for March or June quarter imports.
Imports may slow in the June quarter. “As the general elections commence from April 7, we may see a further reduction, keeping in mind the code of conduct, (which restricts the) mobility of valuables and cash,” highlighted Soni.
During elections, cash movements of more than 60,000 rupees require documentation. “Now, when the current account deficit is under control, the government should take cognizance of the same and should ease the pressure applied on gold imports. This policy should be withdrawn, as the gem and jewellery industry in India is facing survival issues,” concluded Soni.