Sources close to the Reserve Bank of India (RBI) stated that the concerns regarding raw gold, which will be imported by classifying it under brass imports, has been resolved. “The government is likely to announce reduction in import duty on raw gold to bring it on par with pure gold,” the industry veteran added.
Currently, the import duty on pure gold is 1.5%, while it is more than three times at 5% on the raw gold imports. This has discouraged refiners from setting up shop in India.
On the other hand, India imports an average 500 tonne of pure gold annually for last 10 years. However, if the import duty is brought on par with raw gold India may see a few gold refineries being set up that meet international standards.
Currently, India does not have a single London Bullion Market Association (LBMA) approved refinery. LBMA requirements for assaying standards and bar quality are strict, and only those large bars produced in their approved refineries are acceptable in the London market as ‘Good Delivery’. “India has a huge potential to make a viable business proposition for setting up a gold refinery if the import duty on raw gold is slashed,” Manan Desai, COO(Middle East and Indian subcontinent), Citigold Corp, said.
