Gold imports by India are said to have risen in July on arrival of some delayed shipments booked ahead of the implementation of a new national goods and services tax on the first of last month, according to a person familiar with the information.
Inbound purchases rose to 53.4 tonnes last month from 22 tonnes a year earlier, said the person, who didn’t wish to be identified because the data is not public. Sequentially, imports of the metal fell from 72 tonnes in June.
Total imports during January to July jumped more than two and half times to 625.5 tonnes, according to data compiled by Bloomberg. Finance ministry spokesman DS Malik declined to comment on the data.
While traders and dealers stocked up on gold inventories ahead of the levy of the national goods and services tax on fears of a higher duty, demand is expected to slow in the second half of 2017 as buyers take time to transition to the new regime, WGC said last week.
Consumption is estimated to remain below a five-month average of 850 tonnes and be in the range of 650 tonnes to 750 tonnes this year, it said. “Such a rise in imports is not sustainable because the demand from the consumer side in the market is very slow and interest from the investment side has also dried up on low returns,” said Bachhraj Bamalwa, a director with the All India Gems & Jewellery Trade Federation, referring to the July jump.
Shipments from S Korea climbed as importers took advantage of the lower goods and services tax rate and a free-trade pact between the two nations, the person said. Imports from most other countries are taxed at 10 per cent versus zero for those from South Korea.