The tough import norms and high premium on gold in the April-June 2014 quarter saw India’s imports of gold jewellery rise 10 per cent at Rs.696.44 crore.
According to Gem & Jewellery Export Promotion Council (GJEPC), the premier industry body, during the period, exports of gold jewellery, including gold medallions and coins, rose 27.5 per cent to Rs.11,676 crore.
“The premium prevailing in the domestic market in the first-half of the quarter was very high, hovering at around Rs.200 per gram in April 2014. However, after gold imports were somewhat eased in May, the premium fell drastically,” Vipul Shah, Chairman, GJEPC, told this correspondent.
Pankaj Parikh, Vic- Chairman, GJEPC, said the premium was now around Rs.10 per gram. “ Imports during the quarter were largely of crude bangles of 24 carat gold which did not find much favour.”
India is the world’s largest importer of the yellow metal and also the largest consumer of gold jewellery. The jewellery industry was impacted by the Reserve Bank of India (RBI) move in July 2013 to introduce the 80:20 scheme, which required gold importers to re-export 20 per cent of the incoming gold to address the high current account deficit (CAD).
The resultant shortfall in supply had led to a phenomenal rise in the premium on gold in the market and a spike in gold smuggling.
The RBI had, on May 21, eased the norms for import of gold by allowing star trading houses along with some banks to procure gold and meet the shortfall in the domestic market.
Import duty on gold continues at 10 per cent, which, the industry had hoped, would be reduced.
Mr. Shah, however, was cautious saying “the authorities have said they are not comfortable with the CAD position as of now so we expect any announcement with regard to duty reduction to take some time.”
While total gem and jewellery exports had risen 7.71 per cent to Rs.50,334.9 crore during the quarter, Mr. Shah expected exports to pick up, albeit slowly.
“The domestic market, too, is quiet now, and like the gold prices, it is consolidating,” he said.
