Indian gold sales plunge as premiums reach $70 an oz
Over the past year and a half P. Chidambaram, India's finance minister, has been fighting his country's insatiable appetite for gold.
Gold import duties have risen tenfold – from 1% at the start of 2012 to 10% today.
Excise duties now stand at 9% while new rules such as strictly cash only for imports and transaction taxes among other punitive measures have stymied India's gold industry.
The sub-continent celebrated Dhanteras and Diwali last week, two festivals closely associated with bullion buying and the country's wedding season, another major driver of gold sales, is in full swing.
But the government import restrictions have led to a scarcity of physical gold inside the country which coupled with the weak rupee are putting a huge damper on sales of gold this year.
NDTVProfit.com reports Indian traders are paying premiums of a whopping $70 an ounce to London prices.:
"Sales have reduced by 75 percent. Supply is a big problem, we are getting limited supplies from MMTC and others," said Harshad Ajmera, the proprietor of JJ Gold House, a wholesaler in Kolkata.