India's gold demand dips 14% due to crippling restrictions on imports: WGC

Gold demand in India declined 14 percent to 842.7 tonnes in 2014 as compared to the previous year, mainly due to government policies putting restrictions on imports, according to the World Gold Council (WGC). The overall demand stood at 974.8 tonnes in 2013, says WGC ‘Gold Demand Trend 2014’ report. In value terms, the precious metal’s demand dipped by 19 percent to Rs 208,979.2 crore in 2014 as compared to Rs 257,211.4 crore in 2013, it said. The total jewellery demand in India for 2014 was up by eight percent at 662.1 tonnes as compared to 612.7 tonnes in 2013. In value terms, jewellery demand in 2014 was Rs 208,979.2 crore, a fall of 19 percent from Rs 257,211.4 crore in 2013. Total imports stood at 769 tonnes, including grey market, as compared to 825 tonnes in 2013. [caption id=“attachment_2006327” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] “The grey market gold supply was around 175 tonnes. If there are relaxation in policy, duty cuts and transparent pricing this year, the grey market supply of gold will be significantly reduced,” said World Gold Council Managing Director, India, Somasundaram PR. Total investment demand for 2014 was down by 50 percent at 180.6 tonnes as compared to 362.1 tonnes in 2013. In value terms, gold investment demand saw a fall of 53 percent at Rs 44,847.1 crore from Rs 95,460.8 crore in 2013, the report said. “The investment demand declined mainly due to government policies that led to jewellers not selling bars and coins,” Somasundaram said. Total gold recycled in India also declined by 23.5 percent in 2014 to 77.1 tonnes as compared to 100.8 tonnes in 2013. Softer prices, which remained stable in 2014, provided less incentive to sell the precious metal, Somasundaram said. “India’s overall gold demand was slightly lower in 2014, which is not surprising given the crippling restrictions on imports in place for most of the year. This had the biggest impact on investment demand. “In contrast, festival buying, bridal demand and a general upswing in economic sentiment led to eight per cent growth in demand for jewellery - a record high from 2013. “The year also saw high levels of smuggling as a direct result of supply curbs on the Indian gold market,” Somasundaram said. PTI