* Import curbs in India trigger rise in smuggling from
* Pakistan last banned gold imports for a month in August
* Pakistan says jewellery exports to continue without
By Siddesh Mayenkar
MUMBAI, Jan 21 Pakistan has temporarily banned
gold imports for the second time in six months as it tries to
stem smuggling into India, which has clamped down on its own
bullion buying to rescue state finances.
India's import duty stands at a record 10 percent and tight
restrictions on supplies have virtually dried up legal imports
into what used to be the world's biggest bullion buyer, spurring
a surge in smuggling and recycling to meet persistent demand.
"Credible reports have indicated that in the wake of steep
increase in duty on import of gold in a neighbouring country
there has been a surge in its smuggling activity," Pakistan's
finance minister said, according to a statement on the ministry
It said the ban would be for 30 days and exports, mostly
jewellery, would not be restricted. Pakistan last banned imports
for a month in August, 2013.
Official imports into India shrank almost 90 percent in the
six months to November as restrictions tightened. Between April
and September - the latest data available - customs officials
seizures of illegal gold nearly doubled compared to all of 2012.
The World Gold Council puts the amount smuggled into India
at up to 200 tonnes in calendar 2013.
Pakistan usually imports tiny amounts in comparison with its
much larger neighbour, although imports surged last year and
purchases in July - the last month before the previous ban -
amounted to $514 million.
Pakistan said the ban would also check speculation on its
Gold is India's most expensive non-essential import and
helped to swell its current account deficit to a record last
fiscal year. But restrictions have worked and the deficit is now
expected to be about $50 billion in the current fiscal year,
down $20 billion from earlier estimates.
That has prompted the government to consider relaxing curbs,
according to government sources speaking earlier this month.
With India's wedding and festival season in full swing,
demand remains strong, keeping premiums near record highs at
around $130 per ounce. That has encouraged recycling of existing
jewellery to meet demand and also boosted smuggling.
New Delhi's latest attempt to check illegal imports focuses
on the biggest buyers, with jewellers now required to give
details of any purchase of gold bars or jewellery worth over
500,000 rupees ($8,100) by the end of the month.
($1 = 61.5900 Indian rupees)
(Editing by Muralikumar Anantharaman)