Duty hike fears push gold imports up by 23% in January

Gold imports into India surged 23 percent to 100 tonnes in January, the head of the leading trade body here said, as traders snapped up supplies ahead of a hike in duty by a government struggling to rein in its import bill.

India is the world’s biggest bullion buyer and the government is trying to curb imports-second only to oil in value -to rein in a current account deficit which hit a record 5.4 percent of gross domestic product in the September quarter.

[caption id=“attachment_626840” align=“alignleft” width=“380”] Gold imports in 2012 fell 11.25 percent to 860 tonnes, partly a result of a previous tax hike. Reuters[/caption]

January’s imports were the highest in 18 months. The government hiked import duty to 6 percent from 4 percent on January 21 after hints from Finance Minister P Chidambaram on January 2 there could be an increase.

“So many people imported and dumped gold after rumours from the first week of January of an import duty hike. People waited for the duty to increase and earn more profits,” said Mohit Kamboj, president of the Bombay Bullion Association.

In January 2012, gold imports fell 35 percent year-on-year.

Gold imports in 2012 fell 11.25 percent to 860 tonnes, partly a result of a previous tax hike.

Reuters