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Gold
imports by India, the world’s biggest consumer, are poised to surge after Finance Minister Arun Jaitley has not justified industry expectations for a reduction in tax.
Overseas purchases may rise to 100 tones in March from about 25 tonnes in February as jewelers and traders, who delayed purchases in anticipation of the tax cut, replenish stockpiles. Domestic demand will also increase as retail buyers return to the market.
The revival in Indian demand may help gold prices in London to extend the 1st weekly gainer in 5 and spur smuggling.
FM Jaitley retained the duty on Gold at a record 10% in the budget on 28 February, while announcing plans to tap a part of the 20,000 tonnes of stockpiled Gold to lower reliance on imports.