Friday, July 26, 2013

Gold Smuggling Soars In India

Gold Key, weighing one kilogram is used to acc...
India, the world's largest gold consumer, meets almost all of its demand via imports, and purchases from abroad require buyers to sell the rupee to raise greenbacks. Government efforts to curb imports is meant to limit that downward pressure on the currency but has instead driven a surge in illegal imports (smuggling) of the precious metal.

The rupee has fallen more than 10% in the past couple of months and the country has sharply increased the import tax on gold to 8% (from 1% in Dec 2011) and last month India's central bank banned the use of credit to procure gold (requiring dealers to pay in advance for imports). As the WSJ reports, the measures are having an effect. Gold imports declined 11% to 859.7 tons in 2012 from 969 tons in 2011 and the total for June fell about 80% to 30 tons from 162 tons. Read more >>
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