Gold jewellery exports continue to fall in January

Indian exports of gold jewellery dropped in January for a tenth consecutive month, and are likely to fall further due to no sign of any government incentives to revive the sagging shipments. India, which is fighting to reduce its current account deficit, has brought in measures to restrict imports of gold, its second-biggest import item by value after oil. The measures include a rule that 20 percent of all gold shipped in must be re-exported as jewellery, making it difficult for domestic jewellers and even exporters to get supplies despite high premiums. "In most of the ports, due to procedural delays gold is not available," said Pankaj Kumar Parekh, vice-chairman of the Gems and Jewellery Export Promotion Council (GJEPC). Gold jewellery exports from April to January fell 49.5 percent to $5.5 billion, GJEPC said in a statement. January shipments fell 32.8 percent from a year earlier to $482.2 million, it said. Besides the 80/20 import rule, the federal government also levies a record 10 percent import duty on the yellow metal. Gold imports fell to just 21 tonnes in November against a record 162 tonnes in May 2013. "We are asking for primary requirements like a cut in import duty and removal of the 80/20 rule," said Parekh. Analysts say the easing of the Reserve Bank of India's so-called 80/20 export rule will have more of an impact on boosting supply than a cut in the import duty. The leader of the Congress party, Sonia Gandhi, has asked the government to review the tough import restrictions on gold, local media reported on January 23. The finance ministry said later that India will review the curbs by the end of March, which coincides with the end of India's fiscal year. On Friday, due to speculation of a cut in import duty this week, premiums fell 17 percent to their lowest point in more than four months as buyers postponed purchases. However, the finance minister on Monday did not announce any relaxation of import curbs while presenting the interim budget. Copyright: Thomson Reuters 2014

Gold jewellery exports continue to fall in January

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