| Date: |
20-11-2014 |
| Subject: |
'Six traders account for 40% of India's total gold imports' |
|
NEW DELHI: Just six gold traders accounted for as high as 40 per cent of total gold imports to India during April-September, according to a government analysis.
Of the six top gold importers, three are based out of Mumbai and the others have head offices in Bangalore, Haryana and Delhi.
Though there was no illegality involved in the imports by these six traders, the government, which is considering imposing fresh restrictions to curb surging gold imports that have cast a shadow on current account deficit, is examining the issue.
The six firms had imported 7.57 tons of gold in April, which shot up to 47.26 tons in September, sources said.
The imports were done through the legal channel by following the 80/20 rule that allows firms to import gold on condition that 20 per cent of the finished product will be exported.
Interestingly, five state-owned trading houses accounted for just 6.4 per cent of the total gold imported in the country during the six months.
India imported 95.6 tons of gold in September, more than double of 42.2 tons in April.
Sources said, the Finance Ministry is keeping a close watch on these six companies and is trying to ascertain whether they have engaged in any kind of hoarding of gold.
Meanwhile, the government would soon impose some curbs on its inward shipment to prevent current account deficit (CAD) from going out of hand.
Gold import surged almost four times to $4.17 billion in October from $1.09 billion in the same month a year ago. In volume terms, gold imports have touched 150 tonnes in October against 24 tonnes during the same period a year ago.
The high imports have pushed up the country's trade deficit to $13.35 billion as against $10.59 billion in October 2013.
The CAD, which had touched a record high of $88.2 billion or 4.8 per cent of GDP in 2012-13 is estimated to have come down to below $32.4 billion or 1.7 per cent of GDP in 2013-14.
In April-June quarter of the current fiscal, the CAD narrowed sharply to 1.7 per cent, from 4.8 per cent of the GDP a year ago.
The RBI in August last year had imposed restrictions on gold imports and raised import duty on the precious metal to 10 per cent to check burgeoning current account deficit and sliding rupee.
While the steps by RBI helped lower gold imports substantially, they also increased instances of smuggling.
In May, the previous UPA government eased certain rules and allowed private agencies to import gold under 80:20 scheme. This facility was available to select banks only and other entities were barred from importing the metal.
Source : economictimes.indiatimes.com
|