Here’s the article: The Economic Times. More rollbacks of restrictions will be forthcoming. My understanding is there will likely be a reduction in the import duty of 10% currently being imposed. This could literally open up a floodgate of import demand…
The proof is always in the results. Here’s a story from Mumbai that is excerpted from Mineweb.com:
“The RBI decision is set to increase the supply of gold and bring down prices considerably, say traders. “The move will increase monthly average gold import from 25-30 tonnes to 50-60 tonnes. Most jewellers’ cost of funds could also decline with the resumption of gold loan facilities,” said Manish Kedia, bullion trader.
Mohit Kamboj, president of the Indian Bullion and Jewellers Association said, “Gold will now become available to jewellers with the move. Retailers can also start getting gold on loan at 4% to 5% interest, against the existing condition of making full payments for the gold bought. This will help save huge interest cost for most jewellers.”
Coincidentally, I sent an article on this topic to Seeking Alpha late last night. I discussed the issue of the observed ex-duty market premiums to world spot gold that get paid in India. The recent big decline in the ex-duty premium fell again last night from the night before from $90.54 (p.m.) to $51.35 (data from John Brimelow’s subscription report Gold Jottings). This is a clear signal that the market is expecting much more extensive removal of the gold import controls installed last year.
You can ready Seeking Alpha article here see the detailed explanation: The Gold Rush In India Begins.