Indian central bank allows private institutions to import gold
According to Mumbai's May 21 news, the Bank of India relaxed the strict gold import restrictions on Wednesday, allowing seven private institutions to import gold, industry officials said the move will increase India's gold supply and reduce the gold premium during the wedding season.
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As the world's second-largest gold consumer after China, officials expect India's gold imports to increase significantly from current levels. This is expected to support the global gold price. Gold prices fell 28% last year, in part because India restricted gold imports. In response to the domestic expansion of the trade deficit, India raised its gold import tax rate to a record high of 10% in 2013 and introduced measures to tie imports to exports.
The Reserve Bank of India on Wednesday authorized some of the jewellery exporters to resume gold imports, which took effect immediately. These jewelers were banned from importing gold in 2013.
To date, more than 20 groups, including state-owned banks, private banks, and private institutions have the right to import gold.
Haresh Soni, chairman of the All India Jewelry Trade Alliance (GJF), said: “The central bank’s move is welcome because it has eased gold imports to some extent. It is expected that gold imports will increase in the next 8-10 days. It will fall." "The previous import of gold through illegal channels will also be corrected." He said that the legal monthly import volume of gold will soon increase by 10-15 tons compared with the current 20 tons, by then the gold will be higher than the London gold The current $90 per ounce falls to $40-50. In December last year, the premium hit a historical high of $160 per ounce.
The Reserve Bank of India also allows banks to provide loans to gold jewelers. Last year, India banned banks from lending to jewelers, prompting jewelers to seek credit from the fund, resulting in increased costs. Indian analyst Sudheesh Nambiath said: "Gold loans are crucial for jewelers because they can release the cost pressures faced by jewelers."
Last Friday, the Bharatiya Janata Party won the election with an overwhelming advantage. The new Prime Minister Narendra Modi had previously stated that he would relax the gold import controls after taking office. Modi will be sworn in next Monday, and plans to relax gold import controls will also be implemented. Bamalwa said: "Once Modi takes office, we expect India's gold import controls to be further relaxed."
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