After remaining in the positive zone for three months, India's exports contracted 1.2 per cent to $33.98 billion in July, while the trade deficit widened to $23.5 billion.
Mandatory hallmarking of gold would be a positive in making the gold market more organised. Mandatory hallmarking would come into effect from January 15, 2020, with a one-year transition period for trade to sell existing inventories. Experts also expect more policy measures next year to bring in more transparency in terms of gold as an asset class.
Meanwhile, retail jewellery sales in India have declined by 50 per cent since gold price started its uptrend nearly two weeks. Buyers deferred their fresh purchase amid expectations of a correction in gold prices from the current high level.
Providing relief to the economy from widening trade deficit on account of gold imports, the inward shipments of the metal slumped in December to 39 tonnes, Commerce Secretary Rajeev Kher said on Wednesday.
'I found it unbelievable that L&T said 45,000 jobs were waiting to be filled because of unavailability of suitable skillsets.' 'So, when the Opposition sweepingly says there are no jobs, I'm sorry... I'm not saying it's raining jobs, but there are jobs. The (skill) gap has to be bridged.'
Diamond industry expects revenues to drop by 20-25% in the current financial year.
Exporters on Thursday demanded fiscal incentives, tweaking in customs duties on certain products and credit at affordable rates in the forthcoming Budget to boost exports and create jobs. In a pre-budget virtual meeting with Finance Minister Nirmala Sitharaman, the Federation of Indian Export Organisations (FIEO) said the depreciation of the rupee against the US dollar is affecting exports' competitiveness and the sector requires more support. "Creation of employment is the biggest challenge faced by the country...We would urge the government to provide fiscal support to units which provide additional employment in the export sector," the exporter's body said.
Imports in 2016 expected to be lowest in 7 years but experts don't rule out a revival in demand if the yellow metal's price falls
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Imports of gold virtually stopped since July 22 after confusion on the new import rules.
Round-tipping creates the opportunity for exporters to source funds at a much cheaper cost, which they divert to some other business.
At nine-month high, current prices attractive; consumers want to cash in before a correction
Gold is currently ruling at Rs 30,050 per 10 grams.
Blocked working capital worth Rs 1,500 crore, in the almost-defunct job work diamond polishing units, is expected to be released even as diamantaires will issue fresh orders to such units following the GST relief.
Supply through recycling of used gold declined to around 10 tonnes in the second quarter of the current calendar year.
Imports increased by 4.5 per cent, the highest growth in the last six months as crude oil and gold shipments shot up in the month.
Imports also fell for the eighth consecutive months, down 0.75 per cent to $41.14 billion in January, widening the trade deficit to a seven-month high of $15.17 billion.
India's biggest jewellers' association has asked members to stop selling gold bars and coins.
Out of 30 key export sectors, as many as 22 showed negative growth in September.
Orders for the festive season abroad begin from next month.
Concerned over decline in gold exports from SEZs following ban on its trading, the government has allowed units in these zones to export gold items after a minimum value addition of 3 per cent.
Economists polled in a recent survey by Ficci unanimously felt that the rupee will continue to be under pressure in 2018-19
Import segments which recorded negative growth include gold, silver, transport equipment, coal, fertiliser, machinery and machine tools. However, exports of oil seeds, coffee, rice, tobacco, spices, pharma, and chemicals reported positive growth in June.
A combination of externalities such as global trade wars and slowing growth, continuing glitches in accessing offsets under the GST regime, which has created a liquidity crunch for smaller exporters, and the growing competitiveness of smaller countries are causing the slowdown.
Export sectors that showed positive growth last month included chemical, iron ore, electronics, marine products and pharmaceuticals. Decline in overall imports, including oil and gold, led to narrowing of trade deficit.
Official sources say that the finance ministry is aware of the possible spike in smuggling activity and has already asked intelligence agencies to tighten their vigilance and come down on the unofficial entry of gold into India.
'India has about 22,000 tonnes of private gold, held by individuals and temples.' 'Much of this is locked up in safes and vaults as a dead investment. If we can put the vast reserves of gold to use, it would boost the economy,' says V P Nandakumar, executive chairman, Manappuram Finance, India's first listed gold loan company.
Barring rice, spices, iron ore and pharmaceuticals, all the remaining 26 key sectors registered negative growth in May. Imports too plunged 51 per cent to $22.2 billion in May.
At 12-15 tonnes, the imports in September are estimated to be much lower than in the same month last year.
Exports in May 2012 stood at $24.77 billion.
The Reserve Bank of India on Monday moved on Monday to tighten gold imports again in an attempt to rein-in a record high current account deficit by taming demand for the yellow metal.
With a decelerating economy that weakens India's hands on geopolitical issues, it will be interesting to know which way this trip will go.
Sectors throw up a wishlist for the Finance Minister.
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