Silver imports into Gujarat nosedives by 86% in Aug, lowest in five years

Narendra Modi-led govt has retained 10% import duty on silver brought in by earstwhile UPA govt

Import of silver into Gujarat, a major jewellery market, has nosedived by 86 per cent in August 2014, a year after the then Congress-led United Progressive Alliance (UPA) government hiked the import duty on the white metal to 10 per cent. The duty has been retained since then even by the new regime at the Centre despite clamour from the gems and jewellery industry to reduce import duty.

“Import of silver into Gujarat in August 2014 stood at 7.98 metric tonnes (MTs), down by 86.41 per cent. In August 2013, 58.76 MTs of silver was imported into Gujarat,” the data shared by the Gujarat State Export Corporation (GSEC) stated.

The import numbers for silver into Gujarat for August 2014 is the lowest for the last five years, the data suggests. In August 2010, 54.82 MTs of silver was imported into Gujarat while, the import of white metal in August 2011 stood at 26.78 MT. August 2012 saw import of 35.01 MTs of silver into the state.  Import of silver into the state in preceding months of June 2014 and July 2014 was also comparatively low. The two months respectively saw silver worth 3.78 MTs and 6.87 MTs being imported. In corresponding months of 2013, 112.20 MTs and 274.92 MTs of silver was imported into the state.

Nationally, India imported silver worth Rs 53.06 crores from April-July 2014, much less than the Rs 98.94 crores silver imported between April and July 2013, according to the numbers posted on the website of Gem and Jewellery Export Promotion Council (GJEPC), the country’s apex body of the gem and jewellery industry.

Commenting on the reduction of import of silver into Gujarat, Samir Mankad, managing director, GSEC, said, “Silver is an unreliable commodity, which is always subject to speculations. The current data of silver import into Gujarat seem to suggest that traders have excess physical inventory of the white metal with them, resulting in reduced import of silver and emphasis on clearance of inventory.”

All India Gems & Jewellery Trade Federation (AIGJTF) chairman Haresh Soni attributed the reduction in import of silver in Gujarat and across the country to the high import duty imposed on it.

“Because of high import duty imposed on silver, the overall buying sentiment among traders and investors is not good. Consumption environment, at present, is not active and restrictions are not helping revive the investor sentiment,” added Soni.

Soni said that with India’s Current Account Deficit (CAD) coming down to 1.7 per cent of GDP, the government must reduce the import duty as consumption will not increase immediately and sentiments will take time to revive.

“Now that crude oil prices have also come down and dollar showing signs of being stable, the Centre must gradually bring down the import duty on gold, silver and platinum to check smuggling, which has also multiplied,” he said.

India imported 845 tonnes of gold valued at over Rs 2.45 lakh crore in 2012-13 while the quantity of silver imported during 2012-13 was 1,963 tonnes valued at Rs 10,691 crore. India is the largest importer of gold, which is the largest imported item into the country after petroleum.