MUMBAI, Nov 19 (Reuters) - India's largest gems and
jewellery federation has proposed its members curb sales of gold
coins and bars in an effort to prevent the government from
imposing import restrictions on gold after an increase in
inbound shipments.
India, the world's second-largest gold buyer, is likely to
announce some new measures to rein in gold imports which might
include restrictions on a group of private trading firms.
Officials from the finance ministry and Reserve Bank of
India (RBI) were considering whether to reimpose import
restrictions on "star trading houses" that were eased earlier
this year, a source said this week.
Sales of gold coins and bars should be curbed after reaching
around 300 tonnes in 2013, All India Gems and Jewellery Trade
Federation (GJF) said in a statement on Wednesday.
"The federation has estimated total imports in 2014 at about
850 tonnes of which the demand for coins/bars would remain
around 200-250 tonnes," said Bachhraj Bamalwa, director GJF.
The federation had requested a curb on sales of gold coins
and bars a year ago, when total imports were around 900 tonnes.
Bamalwa is expecting gold imports in October to be around
108 tonnes as compared with 95 tonnes a month earlier.
Gold imports in October jumped fourfold from a year earlier
to $4.18 billion, raising concern about India's fragile balance
of payments.
"The gold, which is being imported is purely used for
manufacturing jewellery and not for investment purposes," said
GJF Chairman Haresh Soni.
Jewellery demand in India surged 60 percent in the third
quarter, but investment demand eased 10 percent, according to
the World Gold Council.
Struggling with a high trade deficit, India last year raised
its gold import duty to a record 10 percent and made it
mandatory to export a fifth of all bullion imports.
The trade body has also urged the government to reduce the
duty on gold to 2 percent to make smuggling unprofitable.
The World Gold Council has estimated about 200 tonnes of
gold will be smuggled into India in 2014, versus 150-200 tonnes
last year.
