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Gold Smuggling in India Surges to 50 Tonnes Amid Rising Import Duty
Sentiment: NeutralHigh Priority
What Happened?
India's gold smuggling has jumped to 50 tonnes in the September quarter, up from 3 tonnes a year earlier, due to a rise in import duty from 6% to 15%. Despite this, gold demand remains 29% lower year-on-year.
Key points
- Gold smuggling in India has surged to 50 tonnes in the September quarter.
- The increase in import duty from 6% to 15% has made official imports more expensive.
- Gold demand in India is 29% lower compared to the previous year.
- Jewellery demand rose 33% sequentially to 100 tonnes but remains 20% lower year-on-year.
- Investment demand for gold bars and coins increased 9% sequentially but is 40% lower year-on-year.
Key insights
- High import duties may lead to increased reliance on unofficial supply routes for gold.
- The gap between gold spending and quantity purchased may widen as prices remain high.
- Festive and wedding seasons could temporarily boost gold demand despite high prices.
Why it matters
The rise in gold smuggling indicates a significant shift in consumer behavior due to increased import costs.
Tags
Entities
India· CountryWorld Gold Council· Organization
Source
Times of India
