Offering a space of breath to the Indian jewelers, the latest report revealed that the gold import in India surged nearly 50 tones in March, amid the RBI’s import restrictions. Since the RBI’s infliction of Gold import norms last year, gold import in the country was found to fade by volume, thereby creating drastic supply crunch for jewelries across the country. The gold imported through illegal means have also increased due to the tightening of rules and enforcement of 10 % import duty because of which gold smugglers started experimenting on bizarre methods to sneak gold to India.
High imports were reported in India last month as per the top analysts tracking gold. Gold traders and investors anticipate that gold import of the country would continue to move up after the slight price moderation and import relaxations steps brought about recently. The RBI had recently issued permission for five private domestic banks in India to import gold, which is expected to accelerate the imports further this month. The reports of last week indicate that the inward shipment of precious metal to India has arrived in immense quantities through official channels such as via direct import through the export-focused units. The import of gold by the new five banks authorized by the RBI may have reflected in the current rise of gold shipment in India.
Meantime, the RBI Governor, Mr. Raghuram Rajan hinted on the further relaxation of the gold import curbs today despite the increased gold import flow seen recently. The import surge had also influenced the upsurge of spot market premium for delivery that reached $ 35 an ounce from 45-50 a week earlier. According to the director of Commtrendz Research & Fund Management, Mr. T. Gnanasekhar, the domestic gold price of the country was suffering drastic pressure under a weakening rupee. He adds that now that the Govt. has become more comfortable with the current account deficit which was seen ballooning in the last year, the curbs on import duties could be reduced or relaxed to a minimum level as before. Indian jewelers are also eying the auspicious season, the Akshaya Tritiya which falls on May 2, during which the sales is expected to surge in India. The sales and demand during the season will only accelerate if the price of the yellow metal remains low in the domestic market at the time. Gold price had dropped below Rs. 29,000 per 10 grams as compared to Rs. 31,000 a week ago.