NEW DELHI/MUMBAI (Reuters) - India’s only gold imports in August and September were for exporters’ use, reducing volumes to a fraction of what the world’s biggest bullion buyer used to bring in before the government took steps to rein in purchases.
Gold imports were 7.24 tonnes in September, more than double August’s level of 3.38 tonnes, the finance ministry said on Tuesday.
“The import figures are from SEZs (Special Economic Zones) only, because in domestic areas no gold was imported,” said Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council.
That means they were excluded from the Reserve Bank of India’s new rule which stipulates that 20 percent of imports must be turned around for exports, most of which are in the form of jewellery.
Imports of gold virtually stopped since July 22 after confusion on the new import rules, prompting the commerce ministry to call a high level meeting with officials from the finance ministry, importing banks and trading companies.
After the meeting the customs department cleared some of the shipments at some airports and are in the process of completing the rest, which could ease supply pressures and premiums.
Shipments on October could rise sharply to 30 tonnes on month under the new rule, but still half of the usual monthly average, as exporters await supplies to process pending orders.
“We are starving for supplies,” said Parekh, adding exporters need to complete orders taken from U.S. clients ahead of the peak Christmas season.
India may import a total of 30 tonnes in October, half of the normal average, out of which 6 tonnes might go for exporters, and 24 tonnes for domestic market, Parekh said.
India imported 393.68 tonnes of the yellow metal from April to September 25, slightly higher than the normal average of 60 tonnes each month. A finance ministry official estimated gold imports at 750-800 tonnes in the fiscal year to March 2014.
India, battling with a record high trade deficit and a weak currency, is trying to curb imports of the dollar-denominated gold, the most expensive non-essential item in its import bill.
Reporting by Rajesh Kumar Singh & Siddesh Mayenkar; editing by Prateek Chatterjee and Keiron Henderson