The World Gold Council’s India branch has “expressed concern” over the Indian government’s decision, announced yesterday, to hike up the price of import duties on gold for the second time this year, Bullion Street reported Friday. WGC India’s Managing Director said in a statement that this would only increase prices across the country, which will curb supply and increase smuggling.
“This hike will increase the cost of gold for retail customers," he said. “The nature of demand at the retail level is such that restricting supply will not be effective in the long-run and likely to lead to … demand being met increasingly through unauthorized channels, which will not be positive for either the economy or for society.” He did acknowledge that India’s massive consumption of gold was unsustainable and needed to be curbed, a point the Indian Finance Minister made when announcing the price hike.
India is the world’s largest consumer of gold, and demand has spiked recently due to important upcoming religious holidays and the annual wedding season. India imported 860 tons of gold in 2012, and it has already imported more than 500 tons between January and May 2013, the WGC and Mumbai gold wholesaler RiddiSiddhi Bullions said.
Maya covers the U.N., Europe, and the Middle East for IBTimes. She joined the company in July 2012 after having previously worked with DNAinfo.com and Gawker.