Author: Paul Ploumis18 Aug 2014 Last updated at 08:21:04 GMT
NEW DELHI (Scrap Monster): Gold import through unofficial channels is likely to flourish in India during 2014, said P R Somasundaram, Managing Director-India Operations, World Gold Council.
Ever since the imposition of higher gold import duties and introduction of 80:20 rule, official gold imports into the country have dried up. On the other hand, gold smuggling attempts through land and air have intensified immensely. Nearly one-third of the annual Indian gold demand is likely to be contributed by smuggled gold, WGC observed.
WGC has raised the estimates of smuggled gold in 2014 by nearly 50% in comparison with the estimates of 150-200 tonnes provided for 2013. A recent report published by ASSOCHAM had also estimated unofficial gold imports by the country during 2013 at 150 tonnes. The world gold body estimates India’s annual gold demand in 2014 at a little over 700 tonnes. Around 200 tonnes of gold would be supplied through unofficial channels. The volume of smuggled gold will constitute 28% of the country’s gold demand in 2014.
According to WGC, the domestic supply from recycled gold will remain range bound this year. The current gold prices do not hold any appeal to consumers to sell gold. The subdued supply from scrap gold will be offset by increased supply of smuggled gold this year. The supply of gold through unofficial channels is dangerous, but the consumers are seen not bothered with the source of gold, WGC noted.