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With import curbs on gold bars and coins creating shortages, gold jewellery imports have surged suddenly to over 20 tonnes in the October-December period of 2013, according to the Bombay Bullion Association.
India, the world's largest gold consumer and that meets its entire demand through imports, did not buy any gold jewellery abroad in the same period last year.
"For the first time, gold jewellery imports have picked up suddenly this year. Total imports are estimated to be more than 20 tonnes in October-December of 2013," the Association's past-President Suresh Hundia told PTI.
This is despite gold jewellery attracting higher duty of 15% as compared with 10% on gold bullion.
Hundia said jewellery makers are facing shortage as recent curbs have made bullion imports difficult. They have resorted to jewellery imports to meet domestic demand.
Much of the gold jewellery is imported from the UAE. The imported gold jewellery is melted and re-designed as per the taste of Indian buyers.
To bring down current account deficit, government has taken several measures in the past few months to contain gold imports. Import duty on gold has been hiked to 10%, while traders are mandated to re-export 20% of each gold consignment before ordering fresh shipments.
Going forward, Hundia said gold jewellery imports are expected to remain higher in the coming months as well.
