Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Smuggling to avoid taxes to boost Indian gold imports to record -ANZ

Published 11/05/2016, 06:40 pm
Updated 11/05/2016, 06:50 pm
© Reuters.  Smuggling to avoid taxes to boost Indian gold imports to record -ANZ

SYDNEY, May 11 (Reuters) - India's gold imports could hit a record high this year amid widespread smuggling to sidestep government levies on overseas shipments, Australia and New Zealand Bank, Asia's biggest shipper of physical gold, said on Wednesday.

The forecast by the bank's head of precious metals, John Levin, runs counter to tallies that show gold imports in decline in the world's second-biggest gold market after China.

Levin said he expects 15 percent of India's gold this year to be "smuggled in" or arrive via "other unofficial channels" to beat a 10 percent levy imposed by the government.

Levin also said more semi-refined gold, known as gold dore, was being imported from overseas mining companies because of a lower government levy.

The import duty on gold dore is 8.5 percent.

"You could see a record amount of gold going into India this year," Levin said, "A lot through unofficial channels and a lot of it going in as semi-refined gold."

However, industry officials say unofficial imports are also coming down as Indian market prices trade at a discount to the U.S. dollar spot price.

As recently as a few weeks ago, Indian importers were offering discounts as high as $40 per ounce, or nearly 3 percent of the value to attract buyers.

This has been discouraging smugglers as their margins have been squeezed, Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in the southern Indian city of Chennai, said on Wednesday.

Officially, India's gold imports in the 2015/16 fiscal year that ended on March 31 dropped 16 percent from a year ago to 926 tonnes. last year handled about 15 percent of the world's gold shipments, according to Levin.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.