INDIAN banks have resumed gold and silver imports after a hiatus that stretched for more than a month by agreeing to pay a 3 per cent customs levy that earlier prompted lenders to halt shipments, trade and government sources told Reuters.
The resumption is expected to boost the country’s gold imports, widen the trade deficit and put more pressure on the rupee, which is among Asia’s worst-performing currencies this year.
Worried about mounting pressure on India’s balance of payments and the rupee, Prime Minister Narendra Modi on Sunday urged people to avoid buying gold for a year to help preserve the country’s foreign exchange reserves.
Stronger demand from India, the world’s second-largest gold buyer after China, could also support global gold and silver prices and help local jewellers replenish their inventories.
“We paid a 3pc integrated goods and services tax (IGST) at customs to clear gold and silver shipments,” said the head of the bullion desk at a Mumbai-based private bank.
“Banks waited for more than a month for the government to issue an order that annually exempts them from paying the 3pc IGST. But as the government signalled it wanted to curb gold imports, banks gave up hope.”
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