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The country has tripled import taxes since the start of 2012 to dampen demand as the bullion accounted for almost 80% of the current-account deficit.

21 Mar 2013

MUMBAI (Commodity Online): India's gold consumption for the current year may total 865 metric tons to 960 tons, according to Somasundaram P.R., managing director of the World Gold Council for India.

“Imports should be higher this year according to initial estimates based on the trend in the fourth quarter of last year and as the economy grows,” Somasundaram said to Bloomberg. “There is a sense of optimism in the economy and we can feel it.”

For 2012, India's gold consumption stood at 864.2 tons.

He was optimistic that the gain in import volumes would match the climbing demand for the yellow metal. The nation, last year imported 860 tons.

Meanwhile, India's gold production for January this year stands at 130 kilogram a jump of 13.3% year-over-year, according to official data. In December the figure stood at 150 kilogram.

Back in January, India raised import duty on gold from 4% to 6% to rein in the Current Account Deficit. The nation also more than doubled the import duty on gold dore bars and ores to 5%.

“While the current-account deficit is a serious issue, increasing the duty and trying to stop gold demand is not the positive way and is not going to yield results,” Somasundaram said.

The country has tripled import taxes since the start of 2012 to dampen demand as the bullion accounted for almost 80% of the current-account deficit.


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