New Delhi: India's gold imports could be 750 tonnes in the current fiscal year ending March 31, 2014, a government official said, down 11 percent from last year as official measures curb purchases in what has been the world's biggest bullion buyer.
Gold is the most expensive non-essential item in the country's import bill and the government has tried to bring it down, reducing the trade gap and helping bring some stability to the battered rupee currency, which hit a record low last month.
"We have already seen the import of gold coming down drastically," said Arvind Mayaram, economic affairs secretary at the ministry of finance.
"Because of the measures we have taken we expect imports of only 750 tonnes," he said, adding it could be lower.
Gold imports were 845 tonnes in the last fiscal year, Finance Minister P Chidambaram said in July, helping to spur the current account deficit to an all-time high and prompting the government to raise import duty to a record 10 percent.
Chidambaram said then he hoped they would be "well below" that level this year.
"My sense is it would be much sharper than 100 tonnes" fall from "business as usual" levels of 850 tonnes, Mayaram said on Wednesday.
With gold-loving Indians already shipping in 380.5 tonnes between April and July, the latest forecast for annual shipments on Wednesday by Mayaram would mean they will average just over 50 tonnes a month from September until March 31, 2014.
India's gold bonanza came in April and May along with massive buying in the rest of the world as prices slumped. Indians also buy gold as a hedge against inflation and as a traditional gift at festivals and weddings.
The wedding season will kick off in about a month and in addition, this year a hefty monsoon has boosted farm output which could raise incomes in rural areas where 60 percent of India's gold buying comes from.
Domestic prices have climbed to hit a record 35,074 rupees per 10 grams on August 28, partly fuelled by the falling rupee, and international prices have shed 22 percent since the start of the year, helping to keep hopes sustained that gold will still have space to give buyers good returns.
While demand from Indians may rise sharply, supplies remain constrained by the central bank's rules, including its stipulation that 20 percent of all imports must be turned around as jewellery for export.
Mayaram said a cut of 100 tonnes would save USD 4 billion.
First Published: Thursday, September 19, 2013, 08:47