Indian new gold import rules to simplify procedure

Indian new gold import rules will simplify the buying procedure for dealers and will cut processing costs and avoid delays, traders said on Monday.
India, the world's largest consumer and importer of gold, said in a notification last week that individuals can directly import gold bars bearing the manufacturer's or refiner's engraved serial numbers, after paying an import duty of 100 rupees ($2.21) per 10 grams.
Imports of gold in any other form, including liquid gold and coins, would attract an import levy of 250 rupees per 10 grams.
Until now, only around 15 nominated agencies, such as banks and state-run trading company MMTC Ltd, could import gold. Traders and jewellers had to approach these agencies to import bullion.
"The players in the market will change. The nominated agencies may be out and individual buyers may now dominate the import business," said a bullion dealer based in Ahmedabad, in the western part of India.
Traders said these agencies had been charging up to 0.7 percent of the transaction value as processing charges and the procedure often involved huge paper work, causing delays.
"Now people will directly be in touch with gold producers and sellers and will be in a better position to negotiate prices," said Girish Chiksi, a bullion dealer.
India imports an average 1.6 tonnes of gold a day to meet 70 percent of its annual needs of more than 800 tonnes. The country is also emerging as a key exporter of gold jewellery and has captured more than six percent of the world jewellery trade.
Gold jewellery exports from India jumped 68 percent from a year earlier to $2.55 billion in the year to March 2004.
Indian households stock about 15,000 tonnes of gold accumulated over generations. The country has about 300,000 gold jewellery outlets and around three million goldsmiths and ancillary workers.
Bakul R. Mehta, vice president of the Gem and Jewellery Export Promotion Council said jewellers in India's remote parts, where banks do not offer gold import facilities, would also benefit from the move.
The new rule would also prompt gold producers and refiners to set up shop in India, traders said.