India may limit Gold imports by MMTC, STC
India imported around 120 tons of gold worth $7.5 billion in April, double from the same time last year, and is expected to climb further in May owing to festival and wedding season.
India to take more measures to curb gold imports after WGC said imports of the world's top consumer will likely double in the quarter through June to reach 350-400 tonnes, analysts said.
India imported around 120 tons of gold worth $7.5 billion in April, double from the same time last year, and is expected to climb further in May owing to festival and wedding season.
Industry executives said the government may limit the amount of gold imported by state-run agencies such as MMTCLtd and State Trading Corp. of India Ltd.
Until mid-May, bullion dealers could place gold import orders with a designated bank by paying a margin upfront and the rest on delivery, but a new rule stipulates they pay the entire amount before importing.
Analysts added that rebound in domestic demand would exert further pressure on policymakers as they struggle to contain a runaway current account deficit (CAD), partly stoked by large gold imports, even after hiking the customs duty on gold to 6% from 4%.
Imports of the precious metal have been a major contributor to India's wide trade and current-account deficits. Only crude oil accounts for a larger share of India's imports than gold.
However, they said it's very difficult to ban imports as gold is an emotional issue in India. Any such move will also lead to a rise in the smuggling of gold.
Sumber : Google
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