Comments
The doubling of India’s gold imports from Switzerland in September over the previous month has led to speculation that this was black money finding its way back into India. But a close look at the numbers suggests otherwise.
India imported gold worth 2.2 billion Swiss francs in September, up from 1.1 billion Swiss francs in August, according to data released by the Swiss Customs Administration.
But India is not the only country to witness such a surge in imports of the yellow metal. Total gold exports from Switzerland have doubled from 3 billion Swiss francs in August to 6.4 billion Swiss francs in September.
Asian trendOther Asian countries such as China, Hong Kong, Thailand and Singapore have also upped their share substantially.
For instance, in August, Hong Kong imported about 100 million Swiss francs worth of gold, which shot up to around 900 million Swiss francs in September. Thailand and China, too, witnessed a similar surge.
India’s share in Switzerland’s gold exports in fact dropped to 34 per cent in September from 37 per cent in August.
The increase in in September appears to have been prompted by falling gold prices and the annual pick-up in demand ahead of the festive season. Gold prices have fallen almost 10 per cent since July due to the strengthening dollar. As gold moved close to the $1,200 per ounce level in September, investors and consumers across the globe seem to have stocked up.
No black moneyIndustry sources discount the theory that black money in Swiss banks has returned in the form of gold due to pressure on Swiss banks. “If someone has to send gold to India from Switzerland, he has to send it through a bank and this is all official. I don’t believe that about 50-60 tonnes of gold came into India in one month through fictitious accounts.” In September, India imported about 58 tonnes of gold from Switzerland.
Not a new trendHistorically, Switzerland has been the biggest exporter of gold to India, accounting for more than half of the country’s imports.
In 2011-12 and 2012-13, India imported close to ₹1,50,000 crore worth of gold from Switzerland. In 2013-14, too, it imported almost ₹97,000 crore worth of Swiss gold, despite import curbs.
The UAE, the next biggest exporter to India, accounts for less than one-fifth of India’s imports.
India’s gold imports have always surged ahead of the festival season. Monthly gold import data since 2010 reveal that imports tend to spike sharply between 40 and 65 per cent in October, over the previous month. In 2013, despite the import curbs, gold imports surged 65 per cent in October, over September.
With inputs from Rajalakshmi Nirmal
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.