Money News

INTERVIEW - India's 2009 gold imports seen down

MUMBAI (Reuters) - India’s gold imports in 2009 may fall to their lowest level since trade was liberalised 12 years ago as high prices have put off buyers in the world’s biggest market for the metal, a top importer said on Tuesday.

Gold bars are displayed at Habib Jewels' boutique in Kuala Lumpur September 17, 2009. REUTERS/Bazuki Muhammad

Total imports may fall to 500 to 550 tonnes, Shilpa Kumar, senior general manager of the global markets group at ICICI Bank, one of India’s top three gold importers, told Reuters in an interview.

“We expect the year will be lower than last year as there was such a big fall in the first quarter, it can’t be completely compensated in the calendar year,” Kumar told Reuters.

In 2008, India’s imports were at 712.6 tonnes, according to World Gold Council (WGC).

In the first half of the year, Indian demand was 55 percent lower than a year ago, but the gap will be narrowed to 23-30 percent for the full year as higher wages for government employees and an official scheme for rural employment has cushioned the impact of failed monsoons, she said.

“The spending power in this year has come in through a variety of means -- rural employment scheme, pay commission hikes. That’s why we are seeing car sales pick up for example,” Kumar said.

“Quarter one was really low. Quarter two was kind of going back to normal levels and some kind of growth is happening now.”

Kumar said ICICI’s own sales fall and the current revival were in line with the industry’s and its market share “steady.”


India’s August to October festival season has helped push gold sales as people generally go into a mood to spend and many companies pay out bonuses.

Gold sellers hope the biggest of the festivals, Dussera next week and Diwali and Dhanteras next month, will mitigate some of the poor sales in the first half of this year.

ICICI, which traders say is one of the top three gold importers in India along with Scotia bank and state-run trading company MMTC Ltd, sees investment demand rising, Kumar said, especially with expansion of its branches to 2,000 from 1,493 in a year’s time.

Kumar said the bank was now selling one kg gold bars to high networth individuals as against the 5-200 gram bars and coins available earlier. “Investment segment is growing faster.”

The bank has so far sold one kg bars to its wholesale clients such as gold traders and jewellers who generally buy several one kg bars at a time.

Editing by John Mair and James Jukwey