Indian gold imports to drop sharply

london — Indian gold imports will drop back sharply after jumping in the first quarter, the World Gold Council (WGC) said on Wednesday, as the launch of a new tax regime and restrictions on refiners’ ability to import gold dore take their toll.

Full-year imports will be little changed from 2016’s 524 tonnes, gold industry-funded WGC’s managing director for India Somasundaram P.R. said.

Given the doubling of imports in the first quarter to 253 tonnes, as jewellers rushed to restock ahead of the introduction of the new national sales tax on July 1, that suggests imports will reach only 271 tonnes in the remainder of the year, a quarterly average of just 90 tonnes.

In addition to the impact of the tax, imports of unrefined gold, or dore, will be restricted by new rules that ban refineries which are not regulated by the Bureau of Indian Standards (BIS) from importing gold, Somasundaram said.

So far, only three or four of India’s 31 large refineries are BISaccredited, Somasundaram said. It will take the others an estimated three to four months to receive accreditation after BIS inspection, he added.

“Overall demand is going to be [flat at] 650-750 tonnes, and I don’t expect imports to behave any differently compared to demand,” he said.

“What demand is in 2017 relative to 2016, imports will be relative to 2016. You will see the curve is the same.” —