According to trade sources, India’s total gold imports during the month of April this year is likely to total around 90 tons ($3.5 billion).
This is much lower when compared with the imports of $4.98 billion during March this year. However, April ’15 gold imports are significantly higher when compared with 58 tons imported during April last year. The official April ’15 gold import figures are expected during mid-May.
The gold demand continued to remain buoyant in April, mainly on account of surge in demand during Akshaya Tritiya. Also, robust marriage season demand led to increased gold imports during April. However, rural demand has started to moderate during the month. The nearly 30% drop in imports month-on-month suggests lack of buying interest among rural population. Incidentally, rural demand accounts for almost 75% of the total gold demand in the country.
The gold imports are likely to drop considerably during May this year, primarily on account of two key reasons. Firstly, Met forecast of a below than normal monsoon is expected to hit badly on rural gold demand. Also, marriage season in the country is about to come to an end later this month. Traditionally June and July are considered as dull period for buying gold especially due to lack of festivities and occasions.
India’s gold imports will be heavily dependent on government policies, trade sources noted. Further easing of gold import restrictions may boost legal gold imports by the country. However, consensus estimates indicates that the Indian government has no plan whatsoever to lower the import duty on gold for the time being. Despite repeated requests by the gold industry, government has declined to lower the duty from existing 10%. If the proposed gold deposit schemes turn successful in attracting tonnes of household gold, the country’s overdependence on imported gold could be reduced to a certain extent.