Imports made up 86% of India’s gold supply between 2016-2020, and inbound shipments continue to grow despite high import duty, as per a report by the World Gold Council (WGC).
Since the first duty hike in 2012, India has imported some 6,581 tonnes of gold, averaging 730 tonnes per annum, as per WGC’s ‘Bullion Trade in India’ report.
In 2020, India imported 377 tonnes of gold bars and dore from over 30 countries, of which 55% came from just two countries — Switzerland (44%) and the UAE (11%).
One important change that has taken place in India’s gold market is the growth in gold dore imports. The increase reflects the government’s accommodative stance towards gold refining, the report said.
In the last five years, gold dore imports made up 30% of the total official imports of the yellow metal.
Duty benefits led to a massive expansion of refining capacity in the country as the number of refineries grew from three in 2012 to 32 in 2020. With lower duty on gold dore, its share of gold imports has increased from 11% in 2014 to 29% in 2020.
“As the second largest global market, Indian gold demand is heavily dependent on bullion and dore imports. Looking at current market trends, we expect gold imports to be stronger in 2022, as compared to this year.
“Bullion industry has developed over the last three decades in India with a significant addition to organised refining capacity and an LBMA-accredited refinery,” WGC regional CEO, India, Somasundaram P R said.