Gold Buying India
India to assess gold policy impact as trade gap widens on surging imports Reuters

India will assess the impact of a recent decision that eased gold import curbs in the world's second largest bullion consumer, after surging inbound shipments pushed its trade deficit to an 18-month high.

Gold imports have risen "phenomenally" and the government will examine the impact of November's revision of the so-called 80:20 rule, Trade Secretary Rajeev Kher said in Mumbai on 16 December.

Kher told a conference: "I am sure the government would like to watch the consequences of that revision.

"So we will wait and take a call at an appropriate time."

Gold imports surged to 151.58 tonnes in November, a 38% increase over October's 109.55 tonnes, trade ministry data showed on Tuesday.

That followed 15 December's data that showed gold imports in value terms jumped in November to $5.61bn (£3.59bn, €4.51bn), helping push the trade deficit to an 18-month high.

Indian demand

India is the world's second largest bullion consumer after China.

On 28 November, New Delhi scrapped a rule tying gold imports to exports despite rising inbound shipments.

India's October gold imports surged four-fold to $4.18bn from a year ago. October shipments into the gold-crazy nation jumped to about 150 tonnes, as against 143 tonnes in September and under 25 tonnes in October 2013.

Alongside a record import duty of 10%, the government's so-called 80:20 import rule had demanded that traders export 20% of all gold imported into the country.

The rule, introduced in 2013, was aimed at lowering inbound shipments and reducing the nation's current account deficit.