India’s exports of gold jewellery fell by almost a third year-on-year in November as restrictions continued to hit shipments, and industry officials said recovery was unlikely any time soon.
India’s government has slapped a record 10 percent import duty on gold, its second-biggest import after oil, as it seeks to curb a swollen current account, and has said 20 percent of all imports must be turned around and exported as jewellery.
Exports of gold jewellery fell to $476.1 million in November from $693.62 million in the same period last year. Gold jewellery exports in the eight months from April fell 52.7 percent to $4.46 billion, according to the Gems and Jewellery Export Promotion Council (GJEPC).
“There is still a constraint of raw material… we are facing difficulty in getting the third lot and customs is taking time to clear the goods,” Pankaj Kumar Parekh, vice-chairman of GJEPC told Reuters.
In order to prove export quantities, importing banks and trading agencies are required to submit details of the export performance of their previous two import shipments while bringing in the third lot. That has meant irregular supplies for what used to be the world’s biggest buyer of bullion.
Overseas demand has improved a little bit due to lower prices, but getting the raw material is still a constraint, said Parekh. Gold prices have fallen 6.5 percent since November 1 to $1,236 an ounce.
“Jewellery exports are down as there is no gold coming in… we don’t see a recovery soon until restrictions are relaxed,” said Mehul Choksi, chairman of Gitanjali Gems , who expects a 40 percent fall in total gold jewellery exports for the year.
Total gold imports fell to 23.5 tonnes in October, less than half last year’s average monthly consumption of 60 tonnes, which had pushed premiums to a record high last week.
Falling exports will have a knock-on effect on future imports because of the ties between the two and that will hurt domestic jewellers who should be seeing surging demand as the wedding season gets into full swing.
Imports are expected to be half of usual levels at 500-550 tonnes next year, All India Gems and Jewellery Trade Federation (GJF) said on December 6.
Meanwhile, exports of silver jewellery rose 58.36 percent to $116.14 million in November, but total gems and jewellery exports fell 8.76 percent year-on-year to $22.98 billion for the period from April till November.-Reuters
