October 18, 2017 / 2:32 PM / 9 months ago

India tightens gold import norms for export houses

MUMBAI (Reuters) - India tightened gold import norms for export houses by restricting them from importing the yellow metal only for export purposes and not for selling in the domestic market, the government said in a circular on Wednesday.

A salesperson attends to a customer (not pictured) inside a jewellery showroom, during Akshaya Tritiya, a major gold-buying festival, in Mumbai, India April 28, 2017. REUTERS/Shailesh Andrade/File photo

“...are permitted to import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate,” the government said in the circular.

Some export houses, which account for nearly a quarter of total imports by India, were taking advantage of India’s free trade agreement with neighbouring countries and importing the bullion without paying import duty, prompting the government to impose these curbs, analysts said.

“A few export houses were selling gold at a discount in local market in last few months as they were not paying import duty,” said a Mumbai-based dealer with a private bank, who was not authorised to speak to media.

“Their selling in local market will stop with this change and bank’s business will increase.”

India is the world’s second largest gold consumer importing on an average 75 tonnes every month in 2017 before tapering to 48 tonnes in September.

Reporting by Rajendra Jadhav, writing by Suvashree Dey Choudhury, editing by David Evans

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