India’s gold imports drop 31% in October as inventories pile up
New Delhi/Mumbai: Gold imports by India, the world’s biggest consumer after China, dropped 31% last month from a year earlier, according to a person familiar with the information.
Inbound shipments fell to 66.8 metric tons in October, from 96.7 tons, said the person, who asked not to be identified because the data aren’t public. The figure would leave imports for the first 10 months at 777.1 tons, still 91% higher on the year, according to data compiled by Bloomberg. Finance ministry spokesman D.S. Malik didn’t respond to a call to his mobile phone to confirm the October amount.
Shipments had surged this year on purchases ahead of a new national tax regime, and as some buyers looked to benefit from bilateral duty-free trade agreements with nations like South Korea and Indonesia, avoiding the 10% levy applied to imports from other countries. The subsequent build-up in inventories, coupled with slow domestic demand, has led to an easing off in overseas purchases.
Last month, India moved to curb trade irregularities involving tax avoidance. The government in August also banned exports of gold products above 22 carats.
On the domestic front, sales have weakened following the imposition of a uniform goods and services tax (GST) in July, and after an anti money-laundering act was briefly imposed on the sector in August. The withdrawal of the act in October had spurred expectations of a recovery around the Diwali gifting festival in the middle of the month.
“Post-GST sales were very minimal, so all that inventory had piled up,” Saurabh Gadgil, chairman of PN Gadgil Jewellers Pvt. Ltd, said by phone from Pune. While October was a good month, “we need to see for a couple of months more as to how things shape up as demand has been average post-Diwali,” he said. Bloomberg
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