India's gold imports set to rise
Gold imports to top consumer India are set to jump in coming months after the Reserve Bank of India (RBI) eased gold import curbs, ahead of an expected cut in import duty in next week's budget.
The Reserve Bank of India said on Wednesday banks would again be allowed to import gold on a "consignment basis", under which they act as intermediaries and don't pay for the stock until a buyer has been found, which is usually quickly.
Trading houses will be allowed to bring in gold with no conditions attached.
Gold flows into the country have slowed despite the removal in November of the so-called 80-20 rule that required importing agencies to re-export a fifth of total imports, as importers and customs officials waited for more clarity.
"These clarifications were pending for a long time and should boost sentiment. Gold imports may increase to 75-90 tonnes in coming months as against about 40 tonnes in recent months," said Prithviraj Kothari, executive director of the India Bullion & Jewellers' Association.
Imports had dropped despite the reversal of the rule as the industry was taken aback by the sudden change in the central bank's position and banks remained wary, fearing customs officials would hold up incoming shipments.
"Some imports had been stuck at the airport, but not huge quantities, as customs officials were awaiting clarification from the RBI. They will be cleared now," said Sudheesh Nambiath, an analyst at precious metals consultancy GFMS, owned by Thomson Reuters.
Nambiath said imports could average 80 tonnes a month, boosted by the RBI move and expectations of a duty cut.
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