Indians ready for gold shopping spree, again
After months of regulatory confusion, the gold-loving country is expected to boost imports next month as the government clears stuck shipments, India's Business Standard reports.
In attempt to reduce the country's current account deficit, the Reserve Bank of India (RBI) announced this summer a rule requiring gold importers to export 20% of the precious metal as jewelry.
Because of confusion over how to meet the rule, some imports have been stuck since August with customs authorities refusing the clear them.
According to the Wall Street Journal, this led to a "more than 90% year-over-year fall in August gold imports."
After intense lobbying from the Gems & Jewellery Export Promotion Council (GJEPC), the Directorate General of Foreign Trade (DGFT) has issued clarifications to ensure easier access to gold.
"The gold export business will come on track now, with the fresh clarifications issued by DGFT," said Pankaj Parekh, vice-chariman of GJEPC. "We will be able to receive gold smoothly, as all hazards have been cleared."
While the RBI is eager to reduce imports because of their effect on the current account deficit, the relaxation will likely reduce illegal smuggling of gold – another major concern. With the festival season ahead, demand will surely be high.
Aurobinda Prasad, head of research at Karvy Comtrade, told the Journal that as Indians start buying bullion again, the gold price could rise.
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