Because of increasing prospects of volatile silver prices, the imports into India are about to fall up to 27% in 2012 even though the import duty is unchanged. The head firmly says this statement of the country’s biggest bullion importer.
The head of Asia Scotia Mocatta, a Bank of Nova Scotia unit, Sunil Kashyap, said that investors in India are worried about steep changes in silver prices denting the imports.
He pointed out that silver imports will plunge from 4,800 tones to 3,500 – 4,000 tonnes in 2012.
The silver prices have increased 112% since 2009, despite the government’s provision to keep unchanged the import duty at 5% according to the annual budget 2012. However, the government abolished the excise duty on silver.
The budget doubled the import tax on gold up to 4% of value; jewellers opposed it by the complete shutdown and urged the government for a rollback of duty.
Kashyap said: “Import taxes increase the cost of (the yellow) metal to the final consumer, and so the higher price may dampen demand for 2012.”
He pointed out that the imports of gold could plunge 38% to 600 tonnes in 2012.