MUMBAI (Reuters) - Gold jewellery exports from India rose for the first time in the fiscal year last month, helped by better availablity of gold, and industry officials said this trend will gain pace in coming months with more banks importing.
India’s jewellery exports had been hit by limited gold supplies after it curbed imports to bring down a current account deficit.
After falling more than 50 percent since the start of the year, jewellery exports edged higher by one percentage point in February to $718.36 million from a year earlier, the Gems and Jewellery Export Promotion Council (GJEPC) said.
“The comfort level of availability of gold has increased and more supplies will come with new banks coming on board,” said Pankaj Kumar Parekh, vice chairman of GJEPC. He said the positive trend will continue in coming months.
India has allowed five domestic private sector banks to import gold. The move could boost supplies and bring down premiums for the metal in the world’s second-biggest consumer after China.
Cumulatively, India exported $6.35 billion worth of gold jewellery in the first eleven months from April 2013, down from $11.67 billion.
“Things are a little better than last time as we are getting gold and even the American market is recovering,” said Rajiv Jain, chairman and managing director of Sambhav Gems, which exports gem studded jewellery mostly to the United States and Europe.
Exporters will also eye the next policy moves from the federal government after the current account deficit eased from a record high hit in the year to March 2013.
The CAD, final figures for which are expected to come in the first week of June, is likely to fall to less than $40 billion for the fiscal year ending March 31 from its record $88 billion in the previous year.
“Next year should be good as far as exports are concerned. If there are favourbale changes in gold import policy that will help,” said Jain. “At the last Hong Kong exhibition the response from gems and jewellery traders was good, further adding to hopes.”
A trade fair for exporters was held in Hong Kong from March 2 to March 9.
Reporting by Siddesh Mayenkar; Editing by Anupama Dwivedi and William Hardy