India, which vies with China as the top consumer of bullion, is working on new policies to improve transparency and help expand its US$19 billion gold jewelry industry, according to people with knowledge of the matter.
The plans being worked out by India’s finance and commerce ministries along with industry groups should be finalized by the end of March next year, the people said, asking not to be identified because they are not authorized to speak publicly.
Indian Ministry of Finance spokesman D.S. Malik did not answer calls to his cellphone, while a spokeswoman for the Indian Ministry of Commerce did not reply to an e-mail seeking comment.
Photo: AFP
The start of a spot bullion exchange, to make gold supply more transparent and help enforce purity standards is under consideration, the people said.
An import tax of 10 percent could also be reduced as the government seeks to eliminate smuggling, they said.
The plans also include a dedicated bank for the jewelry industry, according to one of the people.
The overhaul of India’s disorganized and fragmented gold jewelry industry is meant to bolster confidence among consumers, where the gifting of gold at weddings and festivals or its purchase as a store of value are deeply held traditions. Ensuring quality standards and allowing supply chains to be easily tracked are ways to enhance trust.
The estimate for the size of the sector was given by the Mumbai-based India Bullion and Jewellers Association Ltd.
The measures could help underpin Indian demand, which is recovering after slumping to a seven-year low last year.
Consumption is projected to rise to between 771 tonnes and 862 tonnes by 2020, from an estimated 590 tonnes to 680 tonnes this year, buoyed in the short term by a lower-than-expected goods and services tax to be implemented next month, the World Gold Council (WGC) said last week.
Gold for August delivery on Friday rose about 0.1 percent to US$1,255.20, but was down 1.1 percent for the week.
The Indian government fixed the tax on gold at 3 percent, lower than the 5 percent feared by the industry, as it replaces more than a dozen domestic levies with a single duty.
“The gold supply chain should become more transparent and efficient, and the tax reform could boost economic growth, which we see as supporting gold demand,” said the WGC, a producer body that advocates for the metal.
Over the medium term, the sector will find it tougher to evade taxes as legal imports go through the banking system and a full trail will now be established by the new nationwide tax compared with previous duties, which were levied at the state level only, Credit Suisse Group AG said in a note Thursday.
The government is also keen to get the public to recycle its jewelry to reduce the nation’s reliance on imports. After a slow start to its plans to monetize the precious metal held in households and institutions, the government is looking to tweak the scheme and attract more participants, the people said, without giving details.
Other metals:
Spot silver settled at US$16.7 per ounce on Friday, down 3.7 percent for the week.
Copper rose 0.3 percent to US$5,677.50 per tonne on Friday.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort