India Withdraws Gold Import Curbs

In as surprise move, India, world’s second largest gold consumer has announced the withdrawal of the so-called “20:80 scheme” and restrictions placed on import of gold.

Analysts said the move was prompted by the comfortable position on the current account deficit front and healthy build up of foreign exchange.

As per the rule, 20% of all imported gold had to be mandatorily exported before any new shipments could be brought in. The scheme was introduced in July 2013 to rationalize the import of gold in any form/purity, including import of gold into the country as the country’s current account deficit surged to 4.8 per cent in the April-June 2013 quarter.

India remained the second biggest gold consumer after China. Gold imports jumped 280 per cent to $4.17 billion in October. India imported 95,673 kg of gold in September, the highest level in the first six months of this financial year.

In August, imports stood at 50,213 kg. Imports of the precious metal in April, May, June and July were 43,207 kg, 52,612 kg, 77,681 kg and 45,269 kg, respectively.