Gold imports rise 65% in June to $3.12 bn

After past its best for seven months in a row, bullion imports grew by 65.13 per cent to $3.12 billion in June.
Import of gold bars in June 2013 stood at $1.88 billion.
The high imports have slightly pushed up the country's deal shortfall to $11.76 billion in June from $11.28 billion in the same month last year.
In October 2013, gold imports had risen 62.5 per cent to $1.3 billion.
The government has forced limitations on inbound shipments of the costly metal to thin the present explanation shortage. India's CAD, which is the glut of foreign exchange outflows over inflows, touched a momentous high of 4.8 per cent of GDP in 2012-13, mainly due to increasing imports of petroleum harvest and gold.
A high CAD puts heaviness on the rupee, which in turn makes imports classy and fuels price rises.
The government had augmented customs obligation on gold to 10 per cent and barred import of bullion coins and medallions, while the RBI linked imports of the metal to exports.
India is the main importer of gold, which is mainly utilized to meet the command of the jewelers commerce.
The Commerce and business Ministry is headfirst for reduction of the gold import limits to boost gems and jewellery exports, which declined by 5 per cent in June to $3.31 billion.
According to experts, decline in bullion prices in the international market have pressed up imports in the realm.
Gold in New York, which in general sets price trend on the marital front, fell by 0.7 per cent to $1,297.10 an ounce after moving $1,292.60, the lowly since June 19.

Budget 2014-15: Govt surprises by keeping gold import duty at 10 per cent

The government astounded gold bars markets by observance the introduce duty on gold and silver unmoved at 10 per cent in its Union Budget for 2014-15, a move likely to limit out of the country purchases by the second-biggest bullion shopper and further hearten smuggling.
India's major bullion trade group had on Wednesday said the economics minister would likely cut the gold introduce duty to 6 per cent in the just now elected government's first budget arrangement.
FULL COVERAGE: Union Budget
Indian bullion futures jumped 2 per cent on Thursday, widening the premium over global prices which had pointed on the probability of a duty cut.
"This will basically force jewellers, who were on the sidelines pregnant a duty cut, to re-stock," said Sudheesh Nambiath, senior analyst with Thomson Reuters GFMS.
Premiums should get better to $20-30 an ounce in the next few days, he said, against $10 on Wednesday.
India, anxious to orderly a wide open present account shortage, took a slew of actions last year to limit require for bullion, its second-biggest import after oil.
Besides the duty compulsory by the finance ministry, India's central bank also imposed the so-called 80-20 rule that necessary a fifth of all gold imports be re-exported.
BUDGET SPEECH: Full text | Video
The rules have curly supply and pressed premiums up to as high as $160 an ounce in December.

Boundaries on bullion imports to be reviewed by March finish: FM

 
The limitations on bullion imports will be reviewed by March end, Finance Minister P Chidambaram said on Monday.

"I am certain that by the conclusion of this year we will be bright to repeat some of the limitations on bullion introduce but we will do so only when we are extremely sure that we have a firm grasp on the present description shortage," Chidambaram said while addressing tax officials at the civilization Day in New Delhi.

To enclose the increasing gold imports, the government had augmented customs duty on the blonde metal three times in 2013. The levy at present  stands at 10 per cent.

Besides, the Reserve Bank of India has also connected imports of the metal to exports among a widening current account deficit (CAD) and depreciation of the rupee.

Gold imports , which touched a high of 162 tonnes in May, knock down to 19.3 tonnes in November in the wake of a sequence of curbs by both the management and the RBI.

The imports in December was a "slight superior" than in November, Finance Secretary Sumit Bose tell the media.

Chidambaram said there has been about 1-3 tonnes of bullion smuggled into the nation each month subsequent the boundaries compulsory on consignment last year.

"I know bullion smuggling has augmented...But the limitations on gold introduce were totally necessary since it is these boundaries which have brought down bullion introduce which in April and May had crossed 300 tonnes.

"If we had not compulsory boundaries, there was no way we could have managed stability of expenditure or the present explanation shortage," he said.

With the clamour for a responsibility cut on bullion imports rising, Congress President Sonia Gandhi had last week printed to Commerce Ministry in this observe.

Gold imports represent the succeeding major module in the bring in bill after simple oil. burst in bullion introduce had pressed CAD to a evidence high of $88.2 billion or 4.8 per cent of GDP last financial.

Government will evaluation bullion imports strategy, says Anand Sharma

 
Amid strain for calming curbs on bullion import , trade and Industry Minister Anand Sharma on Friday said the government would evaluation the policy, noting there is a need to sock a equilibrium.

The Directorate General of Foreign Trade (DGFT), the business escritoire, the monetary affairs escritoire and Reserve Bank of India (RBI) will converse and take a communally result, Sharma said on the sidelines of an affair.

He, nevertheless, declined to bestow any instance frame.

"As and when situation   demands, I will discuss  with investment minister. We think that there has to be a sense of balance. The anxiety of the  industry have to be met.

"At the similar time we should not fetch in controls in unnecessary method which go in front to people bringing it in during other resources like smuggling. Government is observance attentive eye. I am assuring that sufficient bullion is obtainable for charms and jewellery manufacturing," he said.

He said the department was following 80-20 policy that means 20 percent of the bullion imported into India be supposed to get worth adding up and exported.

"There is no lack when it comes to ease of use of gold for the jewelry and jewellery division and for those who are occupied in business of price adding up for exports. The situation PSUs have ensured stable flood and ease of use. We will revert to the condition since we reflection that it is on senior side," he said.

Sharma said media should also appear at firewood imports.

"Why did the nation which has the third main reserves of firewood in the world get required into a position to trade in firewood merit about $22 billion when we are conversation of only necessary imports like fuel products, not poisonous oil and fertilizers. Why are we importing coal and why should India not be exporting flatten ore?" he asked.

"These are some of the things which wound Indian wealth and which should be stuff of countrywide anxiety. That is where adherent affairs of state has come in that India was not bright to colliery the coal which India has," he extra.

On trade arrears, he said it would be considerably not as much of than the last year. He, nevertheless, declined to provide numbers.

"I can only tell you that in exports we will be doing enhanced and imports will be realistically take away as a upshot deal version arrears this year would be lesser and generally exports presentation will be a good deal better," he said.

CAD widens to 4.9 per cent of GDP in Q1 on high gold, oil imports PTI

High imports of gold and oil pushed current account deficit (CAD) to 4.9 per cent of gross domestic product (GDP) to $21.8 billion in the April-June quarter of the current financial year.

CAD is the difference between inflow and outflow of foreign exchange.

The deficit had declined to 3.6 per cent in the January-March quarter after touching a record high of 6.5 per cent in the October-December quarter. It was 4.4 per cent (or $16.9 billion) in Q1 2012-13.

"The trade deficit, coupled with a slow recovery in net invisibles (income and services), led to widening of CAD to $21.8 billion in Q1 of 2013-14 from $16.9 billion in Q1 of 2012-13," the Reserve Bank of India (RBI) said in its Balance of Payments statement.

Gold imports increased by $7.3 billion in the first quarter of the current financial year. The imports stood at about 335 tonnes in the April-June quarter.

"Excluding the increase in gold imports of $7.3 billion in Q1 of 2013-14 over the corresponding quarter of the preceding year, CAD would work out to $14.5 billion, which translates into 3.2 per cent of GDP," the central bank said.

RBI said there was a small draw down on country's foreign exchange reserves to finance the CAD.

"On BoP basis, there was a slight draw down in foreign exchange reserves of $0.3 billion in Q1 of 2013-14 as against an accretion of $0.5 billion in Q1 of 2012-13," it said.

During the quarter, while exports declined by 1.5 per cent, imports recorded an increase of 4.7 per cent. The trade deficit widened further to $50.5 billion in Q1 of 2013-14, from $43.8 billion a year ago, RBI said.

The government plans to bring down CAD to 3.7 per cent, or $70 billion, in 2013-14 from 4.8 per cent, or $88.2 billion, in 2012-13.