KOLKATA: Imports of gold dore, or impure gold, halved in April compared to that in January, reflecting the impact of an increase in duty on imported dore in this year’s budget as well as the partial shutdown of jewellery shops in continuing protest against the imposition of excise duty on gold and diamond jewellery. The reduction in imports will not only help ease the government’s current account deficit but also contain the entry of conflict gold or gold dore produced illegally, an issue that traders have been raising for some time.
“We are comparing April’s figure with January’s as the first month of the year witnessed normal business volumes of dore for the gold refineries in DTA (domestic tariff area) and EFZ (excise-free zone) locations,” James Jose, secretary, Association of Gold Refiners and Mints told ET.
In January, India had imported 31.25 tonnes of gold dore, he said. In February, the volume dropped to 18.66 tonnes, which indicates the lower volume of gold refining done during the month, in anticipation of some changes in the duty structure in the budget unveiled on February 29. Imports in March further went down to 3.93 tonnes in the aftermath of import and excise duty changes in the budget.
“The duty changes in the budget have practically taken away the operating margins of gold refineries in DTA from 1% to 0.47%,” Jose said. This, coupled with the 3% withholding tax imposed on bullion exports from Ghana, has made it impossible for the medium scale gold refineries in India to source their raw material dore, he said.
