Business Standard

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.

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