NEW DELHI – Gold imports by India, which vies with China as the world’s top consumer, tumbled for a fourth straight month as a 16% increase in domestic prices since the start of the year kept buyers away, according to a person familiar with provisional Finance Ministry data.
Inbound purchases dropped 51% to 31 metric tons in May from a year earlier, the person said, asking not to be identified as the data aren’t public. The country imported 22 t in April.
Finance Ministry spokesperson D. S. Malik declined to comment.
Bullion in Mumbai increased through May as global prices gained on worries over the health of the world economy. Jewellers shut shops for much of March and part of April to protest against the government’s decision to impose a 1% excise tax on gold ornaments made and sold in India. The closures cut sales and boosted inventories.
“Gold rates have gone up and there’s hardly any demand now,” said Kumar Jain, a member of the Mumbai Jewellers Association in the Zaveri Bazaar, the biggest bullion market in the country.
“June and July are lean demand months as consumers get busy with agriculture and school activities.”
Weak demand and increased supply forced the nation’s biggest bullion refinery MMTC-PAMP India Pvt. to stop operations temporarily last month through at least August, when festival demand should start picking up.
Bullion is bought during festivals and marriages as part of the bride’s trousseau or gifted in the form of jewellry by relatives. The country’s main festival season starts in August and concludes with Diwali some time in October or November.
The nation imports almost all the gold it consumes and demand was 848.9 t in 2015, World Gold Council data shows.