Government to Review Gold Policy After Surge in Imports: Report

New Delhi/Mumbai: Government is considering curbs on gold imports by private trading firms after foreign purchases surged in the past two months, two sources with direct knowledge of the matter said.. October shipments into India, the world's No.2 gold consumer after China, jumped to about 150 tonnes, compared with under 25 tonnes a year earlier and 143 tonnes in September, a third source, a top finance ministry official, said on Thursday.. All three sources declined to be identified due to the sensitivity of the issue.. Measures under discussion would restrict imports by private trading firms, which started importing gold around the middle of this year after being barred from doing so from July 2013, the first two sources said.. Officials from the Indian central bank and finance ministry are meeting on Thursday to discuss the policy, local media and Bloomberg have reported.. The October jump follows a 450 per cent surge in September imports to $3.75 billion that weighed on the country's trade deficit, sparking fears that the government could tighten the screws again on gold.. Any new restrictions could increase local premiums to the global benchmark and hurt consumer demand.. Reduced Indian gold buying would also pressure global prices, already smarting from weakening demand in China.. Struggling with a high trade deficit, India last year raised its gold import duty to a record 10 percent and made it mandatory to export a fifth of all bullion imports.. The moves crimped supply, boosted local premiums and encouraged smuggling.. Earlier this year, India eased some of those rules by allowing private agencies to import gold. Imports have since been higher than last year's low levels.. India's gold imports are typically strong in the second half of the year as banks and retailers stock up for major festivals such as Dhanteras and Diwali, when it is considered auspicious to buy gold. The ongoing wedding season is also boosting consumer demand.. India's appetite for gold jumped by more than a third to 225.1 tonnes in the July-Sept quarter, in sharp contrast to the rest of the world, boosted by jewellery demand, the World Gold Council said on Thursday.. "Given the recent seasonality, it would be advisable to wait for another month or two of gold import data before re-imposing any restrictions," Nomura analysts said in a note on Thursday.. "There has been some increase in underlying gold demand as well, but we do not expect this to be sustained.". Copyright: Thomson Reuters 2014

Government to Review Gold Policy After Surge in Imports: Report

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