India has tripled the tax on imports since the start of 2012 to moderate demand as gold accounted for almost 80 percent of the current-account deficit, the broadest measure of trade
MUMBAI(BullionStreet): After an arid 2012, gold consumption in India, world's largest gold consumer, may climb near 1000 tons this year, according to a top WGC official.
India's recent efforts to discourage gold consumption will not affect gold's cause, said Somasundaram P.R., managing director of the World Gold Council for India.
Consumption may total 865 metric tons to 960 tons this year, compared with 864.2 tons in 2012, he said.
“Imports should be higher this year according to initial estimates based on the trend in the fourth quarter of last year and as the economy grows,” Somasundaram said.
Apart from rising incomes,inflation boost investment demand also to increase gold sales in India and can undermine efforts to narrow a record current-account deficit, he added.
India has tripled the tax on imports since the start of 2012 to moderate demand as gold accounted for almost 80 percent of the current-account deficit, the broadest measure of trade.
India is planning to offer inflation-protected bonds for the first time in 15 years next month to damp demand for gold and offer a hedge against inflation.
Gold is a critical and predominant form of saving in rural India, which makes up about 70 percent of the population.
Consumption in India surged 41 percent to 261.9 tons in the quarter ended December from a year earlier, data from the council showed.
Demand for jewelry rose 35 percent, while investment in coins and bars jumped 51 percent.