India is trying to reduce its current account deficit and the government has brought in measures to restrict imports of gold for domestic use, the second-biggest import after oil, which has affected the jewellery sector.
The measures included a rule that 20 percent of all the gold shipped in must be turned around and sold for export as jewellery. However, confusion over how the rule would work virtually stopped imports from the end of July to mid-September.
Jewellery exports rose 16.5 percent on month in value terms to $653.90 million in September, the Gems and Jewellery Export Promotion Council (GJEPC) said in a statement.
"There has been an increase in orders from the U.S. and this trend should sustain in coming months," said Pankaj Kumar Parekh, vice chairman at GJEPC, adding "the commencement of supply of gold is helping exporters in a big way."
India shipped $3.34 billion worth of gold jewellery in the first six months to September, down 58.34 percent from the same period the year earlier. Total gems and jewellery exports fell 15.91 percent to $16.54 billion during the same period.
Imports of gold into India in August and September fell to 10.62 tonnes, all of which went into the Special Economic Zones. That compares with a record high of 162 tonnes in May.
A supply squeeze in bullion affected jewellers' capacity to dispatch shipments. In the domestic market, premiums hit a record of more than $100 an ounce above London prices earlier in the week because of the scarcity of gold.
Imports in October could fall to 30 tonnes under the new rule, still half of the usual monthly average.
India imported 393.68 tonnes of the yellow metal from April to September 25, slightly higher than the average of 60 tonnes a month in recent years. A finance ministry official estimated gold imports would be 750-800 tonnes in the fiscal year to March 2014.
Source:- in.reuters.com
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