Gold imports surge in August on duty-free buying from S Korea

India’s gold imports in August nearly tripled from a year ago, despite sluggish domestic demand as a recent tax change that allowed importers to ship in the yellow metal from South Korea without paying Customs duty saw some traders purchasing heavily from the country, provisional data from consultancy GFMS showed.

Higher purchases by India, the world’s second biggest consumer, could support global prices, trading near their highest level in a year. It could also widen the South Asian country's trade deficit.

The country’s August gold imports climbed to an estimated 60 tonnes from 22.3 tonnes a year ago, GFMS said. In the first eight months of 2017, the country’s imports rose to 617.5 tonnes, up 158 per cent from a year ago. “Trade houses imported nearly 20 tonnes from South Korea as they were not required to pay import duty,” Sudheesh Nambiath, a senior analyst with GFMS, a division of Thomson Reuters, said on Monday. India imposes a 10 per cent import duty on gold, but this does not apply to countries with which it has Free Trade Agreements (FTAs), like South Korea. To avoid duty-free imports from those countries, India had previously imposed a 12.5 per cent excise duty.