India’s gold imports fell dramatically by 76 percent to a mere 60 tonnes in the April-July of the current fiscal as high import duties and other local taxes bit hard into demand.
Last year, India’s gold imports in the same period were at 250 tonnes.
According to the gold and silver refiner MMTC-PAMP, about 80 tonnes of gold came into India thorough unofficial channels, as a 10 percent import duty pushed people to smuggle in the yellow metal.
Officials have said that it will be difficult to curb unofficial imports unless duties are reduced, even though lower imports are a piece of good nes for the country’s current account deficit.
The imposition of one percent excise duty has prompted traders to focus on selling their unaccounted stocks at a discount before importing fresh quantities.
India, the world’s second biggest gold consumer after China, imported 650 tonnes in the 2015-16 fiscal. The government has been trying to wean people away from physical gold and buy gold bonds in its efforts to bring out hundreds of tonnes of the metal stashed away in bank lockers and temples.