No gold was imported in August with impasse continuing over shipments into the country, following new RBI guidelines.
The jewellery industry, however, has not been affected as prices over Rs 31,000 for 10 gram are encouraging customers to sell their gold holdings.
“No import has been made since the Customs Department has not put in place the system of allowing shipments according to the RBI guidelines,” said a Bombay Bullion Association spokesman.
When contacted, sources in the Directorate-General of Foreign Trade conceded that no gold was imported last month. It is for the Customs Department to deal with the issue, sources said.
The RBI, in its circular issued in July, said that 20 per cent of an imported consignment should exclusively be made available to exporters.
It also said that an exporter could procure gold from nominated agencies, including banks, based on the level of purchases in the last three years. The highest quantity that an exporter bought in the last three years will be the maximum amount permitted but, the RBI said, all the requirement cannot be imported at one go.
It also said purchase of more than two months’ demand would be deemed unusual. The rule also applies for import of semi-purified gold bar called dore.
The RBI rules to curb gold imports is part of the Government’s measures to tackle rising current account deficit, led by higher imports. The measures included a hike in import duty to 10 per cent last month.
The Government was forced to step in as imports surged to 338 tonnes during April-June, up from 153 tonnes during the same period a year ago.
According to trade sources, indications are that smuggling is still unorganised but it is only a matter of time before that happens.
“Even now, no one is sure if a customer is holding recycled gold or contraband,” said a jeweller.
In another circular issued on Wednesday, the RBI said that supplying gold to units in the special export zones would not be deemed as exports.
“We are not feeling the pinch of zero imports because plenty of recycled gold is available now. Customers are selling and the demand is also low,” said Ba. Ramesh, Joint Managing Director, Thangamayil Jewellery Ltd.
According to the Bombay Bullion Association, around one tonne of gold is sold to jewellers in jewellery, coins and bars every day across the country.
“Some 1-2 tonnes of gold are held up with the Customs for lack of clarity. In the last week or so, we must have recycled 10-12 tonnes of gold,” he said.
“In addition, gold financiers such as Muthoot Group are selling gold that have been defaulted by those who had pledged them,” Ramesh said.
Gold is, however, finding its way into the country through the smuggling route. According to the Customs Department, smuggled gold worth about Rs 100 crore has been seized in the last few weeks.
On Wednesday, gold for jewellery (99.5% per cent purity) quoted at Rs 31,940 for 10 gm and pure gold (99.9% purity) at Rs 32,100 in Mumbai.
In the global market, spot gold fell to $1,395.58 an ounce and gold futures maturing in December at $1,395.80.