India announces measures to curb gold imports - ICICI Bank : Treasury Research

Amidst persistent concerns over stubbornly high gold imports in India, the Government has recently announced a slew of measures to address the issue.

Gold imports have risen by 138% to USD 7.4 bn in April and as per anecdotal reports is expected to come in around USD 8 bn in May.

Amongst the recent measures, the Government has hiked import duty on gold from 6% to 8% with immediate effect. The RBI also restricted gold imports on consignment basis for banks and authorized agencies and mandated the need for 100% cash margin on letter of credit.

Though the above restriction is expected to create short term demand supply mismatch, significant moderation in demand is unlikely owing to its resilient nature and socio cultural backdrop.

Source : Equity Bulls

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