Despite all efforts from the Indian government to curtail India’s demand for precious metals – for example a 10 % import duty on both gold and silver, the Indian people continue to put their savings in a store of value they consider being prudent; precious metals.
By hiking the import duty on gold in 2013 from 4 % to 10 % and the implementation of the 80/20 rule importers were thwarted shipping in metal. In part because the importers needed to find out how to work through the new rules, which were deliberately setup to complicate the process.
At first official gold import dropped like a brick, the premium on gold over London spot sky rocketed to 25 % and smuggling flourished.
Since 2014 India’s customs department, the DGCIS, discloses preliminary estimates on commodity trade data (only imports for precious metals). The latest data shows gross gold import in October jumped to 106 tonnes, up 13 % m/m, up 260 % y/y. 106 tonnes gross import is 1,271 tonnes annualized.
Year to date India has officially gross imported (ex smuggling) 597 tonnes of gold, down 21 % y/y, annualized 716 tonnes.
Recent history has demonstrated that the more gold is imported through official channels the less pressure there is on the premium of gold in India. Throughout October the premium hovered around 2.5 %, excluding the 10 % import duty.
India gross imported a whopping 1,243 tonnes of silver in October, up 54 % m/m, up 217 y/y. This is one tonne short of the 1,244 tonnes record of May 2011.
Year to date India has gross imported 5535 tonnes, up 13 % y/y, annualized 6,641 tonnes.
Premiums on silver in India floated around 2 % throughout October, excluding the 10 % import duty.