Gold imports rose nearly 19-fold to 34 tonne in January, against a paltry 1.8 tonne in the year-ago period, as prices tumbled from its record Rs 18,500 level in December 2009, to Rs 16,500 level per ten grams.
"Gold import surged, as prices that ruled at record Rs 18,500 per 10 grams level in December 2009, declined to rule around Rs 16,500 17,000 levels in January, increasing consumer demand," Bombay Bullion Association director Suresh Hundia told PTI on Wednesday.
Currently gold is trading at Rs 17,035 on the Multi-Commodity Exchange, while in local markets it is available at around Rs 17,200. However, in the global markets, it is slightly higher at $1,139 an ounce (28.34 grams).
Hundia, however, said import is likely to be hit after the Government hiked customs duty by Rs 100 per 10 grams in the Budget from Rs 200 per 10 grams.
Analysts also said the move will lead to higher import cost, which in turn will affect domestic prices from March.
The Budget reduced basic customs duty on gold ore and concentrates from 2 per cent ad valorem to a specific duty of Rs 140 per 10 grams with full exemption from special additional duty, to encourage domestic gold refining capacity.
This implies that importers have to pay a fixed Rs 140 per 10 grams on gold ore and concentrates irrespective of the price.
However, the move will not have much impact on the domestic market much as the country mainly imports gold in the form of bars and coins, analysts noted.
