You are here
India may try anything to reduce gold imports -- except stabilize the rupee
India May Consider More Steps to Curb Gold Imports
By Rajesh Roy
The Wall Street Journal
Thursday, May 30, 2013
NEW DELHI -- India may consider more steps in early June to reduce domestic gold consumption if imports of the metal remain high this month, a senior finance ministry official said Thursday.
Gold imports in April more than doubled in value from a year earlier to $7.5 billion as prices hit a two-year low. Imports are expected to be high again in May because of the wedding season and festival-related demand.
"Imports have jumped substantially in the first fortnight of May. We are waiting for the complete month's data before taking a call if more measures are required," the finance ministry official told The Wall Street Journal.
He didn't elaborate what steps the government may take, but said there is no plan to ban gold imports or to further raise the import tax.
... Dispatch continues below ...
GoldMoney Reduces Storage and Exchange Fees
GoldMoney has reduced by a third its storage fees on gold stored at all VIA MAT vaults to just 0.12 percent per year and halving the cost of storing silver with VIA MAT Switzerland to bring it in line with GoldMoney's silver storage fees at other vault locations: 0.49 percent per year as the standard fee and 0.39 percent per year for more than 50,000 ounces of silver. In addition, GoldMoney's minimum storage fee has been reduced to only 0.001 grams per month for gold, platinum, and palladium, and 0.001 ounces per month for silver. For the full details of these significant fee reductions, please visit:
Industry executives said the government may limit the amount of gold imported by state-run agencies such as MMTC Ltd. and State Trading Corp. of India Ltd.
"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," the official said.
Gifting gold jewelry during weddings is a tradition in India. Buying usually increases during Hindu festivals such as Diwali and Akshaya Tritiya. This year, Akshaya Tritiya, a major gold-buying festival, was on May 13.
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.
India is estimated to have imported 100-120 metric tons of gold in April and the figure is expected to remain at a the same level this month, industry executives said. Usually, India imports 70-80 tons a month.
India has already taken several steps to damp demand for gold, including raising the import tax to 6% from 2% over the past year. 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.
India will also sell from next month government bonds that will adjust returns based on the rate of inflation, a move aimed in part at weaning away small investors from buying gold as a hedge against high inflation.
* * *
Support GATA by purchasing DVDs of our London conference in August 2011 or our Dawson City conference in August 2006:
Or by purchasing a colorful GATA T-shirt:
Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:
Help keep GATA going
GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:
To contribute to GATA, please visit:
How to profit in the new year with silver --
and which stocks to buy now
Future Money Trends is offering a special 16-page silver report with our forecast for 2013 that includes profiles of nine companies and technical analysis of their stock performance. Six of the companies have market capitalizations of less than $800 million and one company has a market cap of only $30 million. The most exciting of these companies will begin production in a few weeks and has a market cap of just $150 million.
Half of all proceeds from the sale of this report will be donated to the Gold Anti-Trust Action Committee to support its efforts exposing manipulation and fraud in the gold and silver markets.
To learn about this report, please visit: