Out of the total gold import demand in India in 2014, more than 200 tonnes -- almost 20 percent -- would be served by the grey market, a top official of the World Gold Council said here Thursday.
"The total demand in 2014 is estimated to be between 850-950 tonnes, out of which upwards of 200 tonnes is likely to be served by the grey market," said Somasundaram P.R., managing director (India), World Gold Council.
He was speaking to reporters on the sidelines of the '7th International Gold Summit' organised by the Associated Chambers of Commerce and Industry of India (Assocham).
Gold import through the grey route -- a euphemism for smuggling -- increased since the central government hiked customs duty on the import to 10 percent.
He said: "In India, 22,000 tonnes of gold valued at over $1 trillion is held privately (including households and temples). A range of social, cultural and economic factors ensure that gold remains a preferred asset class across households regardless of supply restrictions."
Regarding the curbs put on gold import, Somasundaram said: "It is our hope that the short-term curbs on gold, understandable at the time they were introduced but which have led to an increase in smuggling, will be reviewed and reversed soon."
"Discussions on gold in India should go beyond curbs and focus on how this industry can encompass an all-round growth, delivering enhanced economic contribution to all its stakeholders," he added.
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Talking about the drop in rainfall this monsoon and its impact on the industry, Somasundaram said it would impact the rural demand to some extent.
Sunil Soni, director general of the Bureau of Indian Standards (BIS), told the summit that his organisation was working to provide a unique ID to each piece of hallmarked jewellery,
Gold hallmarking is a purity certification of precious metals. BIS, which works under the union Ministry of Consumer Affairs, Food and Public Distribution, is the administrative authority of hallmarking.
"We want to give unique ID/number for each hallmarked item and the same number will be there for number of pieces, this will help in curbing duplication and help in traceability i.e. in case you happen to buy one such piece you can hold someone responsible if it is found to be sub-standard," Soni said.