Gold imports by India, the world’s second-biggest user, more than doubled in June from a year earlier amid a rush by jewelers to build up inventories ahead of a tax change.
Inbound shipments surged to 72 metric tons last month from 31.8 tons a year earlier, according to a person familiar with provisional data from the finance ministry, who asked not to be identified as the figures aren’t public.
Finance Ministry spokesman D. S. Malik declined to comment on the numbers.
India’s government has embarked on the most radical tax overhaul in decades, ushering in a new nationwide goods and services tax to replace dozens of local levies.
Speculation that the new tariff may be as much as 5 percent for bullion traded locally, including for manufacturers buying from importers, prompted a jump in imports to 126 tons in May.
The gold rate was eventually set at 3 percent, and implemented from July 1.
“Imports will slow down now as whatever stock-building had to happen, has happened,” Ranjeeth Rathod, managing director at importer MNC Enterprises (P) Ltd., said by phone from Chennai. While imports have jumped, retail purchases have been weak and will remain low until the festival season starts from mid-August, he said.
Indians buy gold during festivals and for marriages as part of the bridal trousseau or as gifts. The nation imports almost all the gold it uses.
Local consumption is forecast to rise to 850 tons to 950 tons by 2020 from about 650 tons to 750 tons in 2017, according to an estimate from the World Gold Council.