 "Gold import bill up 47% in 8 months of 2015")
However, good part is that there is a surge in import of dore or unrefined gold which was 120 tones last year while in first 8 months of the year it has reached 150 tones.
Total gold import in 2014 was $31.2 billion which has increased to $23.98 billion in just 8 months and analysts say another 300 tones or $13-13.5 billion dollar worth gold is likely to be imported in remaining 4 months of the current calendar year.
Imports may remain subdued in September as market has again slipped to marginal discount of $1-2 per ounce and demand is low due to pitrupaksha.
However, "from September to December imports are likely to be around 300 tones or worth $13 billion. Import may still be around Government's comfort level of $35 billion," said Sudheesh Nambiath, Senior Analyst- Precious Metals, South Asia & UAE at GFMS Thomson Reuters.
Gold prices have remained lower this year. From the range of $1250-$1300 per ounce last year they are now trading around $1100. However, after withdrawal of 80:20 import restrictions last year end, imports have increased. Imports did slowed in around May-June on fear of low rural demand due to weak monsoon but fall in prices in end of July has led to sudden increase in imports ahead of festive season.
Increasing capacities of gold refineries in India has led to spurt in import of dore. Refineries are importing it because there is 2% lower import duty on it and they also get refining margins on the dore they convert in to gold bars. From roughly 15% this year dore's share may end higher at 25%. In August Dore import is estimated at 32 tones which is highest ever monthly import.
In India MMTC PAMPS is at present only LBMA certified bullion refinery. However Edelweiss Commodities also hoping to get the similar status in next 2 years and Rajesh Exports is looking to integrate its refinery with Valcambi, its latest acquisition.
"In 2 years' time atleast 3 LBMA refinery with over 500 tones total refining capacities and other small refineries taken together, dore imports will be over half or even more of India's total gold imports,' said D P Jhawar, President and Head of Commodities Business at Edelweiss.
Dore import requires lesseer outgo og foreign exchange as it is cheaper and value addition by refining is done in India. Even government has incentivised it by duty concession. Against 10% import duty for gold, dore attracts 8% import duty.