Just six traders account for 40% of total gold imports

Though there was no illegality involved in the imports by these six traders, the government, which is considering imposing fresh restrictions to curb surging gold imports that have cast a shadow on current account deficit, is examining the issue. The six firms had imported 7.57 tons of gold in April, which shot up to 47.26 tons in September, sources said.

The imports were done through the legal channel by following the 80/20 rule that allows firms to import gold on condition that 20 per cent of the finished product will be exported. Interestingly, five state-owned trading houses accounted for just 6.4 per cent of the total gold imported in the country during the six months.

India imported 95.6 tons of gold in September, more than double of 42.2 tons in April. Sources said, the Finance Ministry is keeping a close watch on these six companies and is trying to ascertain whether they have engaged in any kind of hoarding of gold.

Gold import surged four-fold to $4.17 billion in October from $1.09 billion in the same month a year ago.  In volume terms, imports touched 150 tonnes in October against 24 tonnes in October 2013. The high imports have pushed up the country’s trade deficit to $13.35 billion against $10.59 billion in October 2013.