India’s Gujarat gold traders see easy availability of smuggled metal
Easy availability of smuggled metal reduces means no urgency for Indian traders to bring in gold via official channels. Silver imports limited too through high duties.
Posted: Tuesday , 12 Aug 2014
MUMBAI (Mineweb) -
Despite some minor relaxation in government curbs in May this year, gold imports into Gujarat state have fallen to a record low in July. Data showed that just 3.06 metric tonnes of gold was imported in July 2014, which has been termed the lowest figure for July in the last six years, and as compared to 8.9 metric tonnes in July 2013 – down around 60% year on year. This parallels somewhat similar figures elsewhere in India
After several months, gold imports had re-crossed the double digit mark in June 2014, recording 17 tonnes in Gujarat – the home state of India’s new Prime Minister, Narendra Modi. Analysts had said this was one of the main reasons why the new government did not relax its stranglehold on gold import curbs in its first Budget in July.
Bullion traders have maintained that since gold is easily available in the market given the unprecedented rise in smuggling, there is no urgency to bring in the precious metal via the legal channels.
Reports indicate that in Gujarat alone, over 130 kilograms of smuggled gold has been recovered as of July 2014, by central intelligence authorities. These are the official figures, and traders indicate that the amount could be higher by several thousand kilograms.
A faint silver lining is visible however. Silver imports in Ahmedabad, Gujarat, which had crossed 1,500 metric tonnes during April 2013 to January 2014, a record high for the last five years - is showing signs of a renewed small revival.
Imports of the white metal have recorded a small rise in comparison to June 2014, with 6.87 tonnes of silver imported in July 2014. However, it was hugely below the 274.92 metric tonnes imported in July 2013.
Silver imports by the Indian state had earlier recorded a 450% jump in the nine month period ‘til January 2014, as compared to the previous corresponding period of last year.
The government's high import duty on gold, which was also applied to silver, has clearly put paid to the huge 2013 appetite, said traders.