)
Premiums charged for physical delivery of gold shot up on Wednesday, in the wake of rumours that the Reserve Bank of India (RBI) or the ministry of finance might impose more restrictions on gold imports.
Premiums had fallen to below $10 per ounce on Tuesday after Diwali holidays, as new gold arrived in the market. However, they went up again and quoted around $15 on Wednesday.
Before Diwali, the finance ministry had said it would decide on putting more restrictions on gold imports after the festival.
Trade and industry circles believe that in a day or two, more restrictions in the form of tightening import norms of 80:20 or fixing an import quota for star and premier trading houses or even linking import by star and premier trading houses to their past exports instead of imports as of now might be possible.
However, an analyst said due to imports by trading houses, physical delivery premiums have fallen and on balance of payment front because of lower crude oil prices there are no big worries and hence restrictions on imports will benefit smugglers and importers.
However, India Bullion and Jewellers Association (earlier Bombay Bullion Association) has recommended the government to cut import duty, which will effectively reduce smuggling.
There is also a buzz that import norms need to be tightened to ensure gold import doesn't shoot up, as a long marriage season is ahead and gold prices are lower.
In the current financial year, in first seven months, already imports are estimated over 500 tonnes and estimated to have crossed $21 billion against $28 billion worth of import in 2013-14 whole year.
