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Business News/ Politics / Policy/  Gold imports fall 5.7% in Jan-Mar; demand up 27%: WGC
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Gold imports fall 5.7% in Jan-Mar; demand up 27%: WGC

Good rabi crop and lower gold prices during February led to higher jewellery demand, the WGC said

Gold import and demand in India, the world’s largest consumer, stood at 228 tonnes and 202.1 tonnes, respectively, in the year-ago period, it said. Photo: Priyanka Parashar/ Mint (Priyanka Parashar/ Mint )Premium
Gold import and demand in India, the world’s largest consumer, stood at 228 tonnes and 202.1 tonnes, respectively, in the year-ago period, it said. Photo: Priyanka Parashar/ Mint
(Priyanka Parashar/ Mint )

New Delhi: India’s gold imports dropped by 5.7% to 215 tonnes in the January-March period of 2013, even as its demand rose 27% to 256.5 tonnes, World Gold Council (WGC) said on Thursday.

The demand for the precious metal will continue to be robust in the coming months though the government has imposed some curbs on imports, the WGC said, while cautioning any further supply controls will activate unauthorised channels, WGC said in its report.

Gold import and demand in India, the world’s largest consumer, stood at 228 tonnes and 202.1 tonnes, respectively, in the year-ago period, it said.

“Gold imports were 215 tonnes in the first quarter of 2013 as compared to 228 tonnes in the same period last year. Imports remained lower as stockists had purchased heavily in the previous quarter in anticipation of rise in import duty," WGC India Managing Director Somasundaram PR said at the release of the report.

Of the total demand of 256.5 tonnes, the WGC said the country’s jewellery demand rose by 15% to 159.5 tonnes from 138.3 tonnes, while investment demand increased by 52% to 97 tonnes from 63.8 tonnes in the review period.

“Gold demand in India for both jewellery and investment continues to remain strong. The price fluctuations in gold recently have only served to reinforce Indian consumers’ appetite for purchasing physical gold," Somasundaram said.

Good rabi crop and lower gold prices during February led to higher jewellery demand, the WGC said, adding that “the negative impact of rise in gold import duty in late January was for the most part eliminated by these positive factors".

Sharing outlook for April-June quarter, WGC India chief said demand for gold would remain robust due to lower prices and higher buying in the ongoing wedding and festive season.

The demand will also be fuelled by an expected rise in rural income on good monsoon projected this year. Besides, there are 20% more auspicious days this year and this will drive demand for the precious metal, he said.

Asked if import curbs will reduce demand, Somasundaram said: “There is nothing to interupt buying. Trying to restrict gold demand may not be effective. We believe putting further controls on supply side is not going to reduce demand, instead it might encourage unauthorised channels."

Due to high current account deficit, the government is seeing gold as an expense, while households look at it as an investment, he added.

He further suggest that over 20,000 tonnes of gold is kept idle in India and the government should take measures to monetise it to boost the economic activity.

At the global level, WGC said gold’s demand fell by 13% to 963 tonnes in the first quarter of 2013 as strong demand for gold jewellery, bars and coins was exceeded by substantial net outflows from gold ETFs. India, China and the US were primary areas of growth but demand fell in Europe and East Asia, it added.

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Published: 17 May 2013, 12:23 AM IST
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