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Indians are back to buying gold from Dubai. Jewellers, with a presence in the United Arab Emirates and the Gulf region, said purchase of gold by Indians travelling to Dubai, NRIs and Indian expats living in the region has increased after the new tax regime was rolled out on July 1.
He said three categories of Indian buyers are buying more gold in Dubai -those settled in the Gulf, Indian tourists to the Middle East and transit passengers travelling from the US and Europe. Jewellers estimate the increase at per cent. Gold purchased in India is costlier by Rs 3, per 10 gm than in Dubai. The gold market in India is in a mess. Smuggling continues big time. Corrosion within the vaults owned and managed by the customs department — where gold is stored — is now in evidence.
International buyers of Indian jewellery are wary because of the prevalence of gold adulteration in this country documentation on all the above can be found at http: Today it could be significantly higher. Yes, if there is political will, and the willingness to take a fresh look at gold markets.
That is what Turkey did a couple of dacades ago, and quite successfully http: In fact there are three things that the government should do. First, it is imperative that the government reclassifies gold as a financial investment.
True, it comes under the finance ministry today. This was unlike the past when it used to be considered a commodity and came under the ministry of consumer affairs. But it is still treated as a non-financial instrument. Most poor people, even small businesses, use gold as collateral to borrow urgently needed money. The growth of gold loan companies provides evidence of this need.
Even SBERBank, the largest bank in Russia — which now has an office in New Delhi — has applied to the government to permit it to enter the gold loan market http: They allow for life imprisonment and make the act of fraud a non-bailable offense http: No fresh laws have to be written or passed. There is no need to create a new legal structure. Just the re-classification of gold as a financial investment should do the trick. That what is gold trading at dubai in indian rupees give teeth to hallmarking, which is now compulsory for all gold jewelers.
Second, brush the dust off the report the RBI submitted to the government in This entity would look at all aspects of gold, and create proper rules that could ensure both fair play and growth for the industry.
Third, and most important, the government needs to reduce the import duty on gold. Smuggling — if any — had definitely slowed down then. Unless this is done, smuggling will remain attractive. It will also help build a channel for smuggling in of drugs and arms. These designated bodies then get the imported gold verified by certified gold refineries because even imported gold can be contaminated. The refineries in turn would then sell to wholesellers.
This category could be defined what is gold trading at dubai in indian rupees people willing to buy more than two tonnes a year, with suitable bank guarantees as well. The refiners and wholesellers would be responsible for ensuring that hallmarking http: Where there are lapses, the incident would automatically get subjected to FICN related investigations and procecutions.
But such losses would be notional. In fact, the government could gain a lot more compared to what the customs department may lose. Even that is a notional loss. The amount the government could lose if smuggling remains rampant could be a lot more. If duties are not reduced, gold what is gold trading at dubai in indian rupees would also encourage smuggling in of arms which could jeopardize national security.
This is because the profits from gold alone will permit smugglers to create a clandestine channel. This channel would identify transporters, routes, landing points, compliant officials and runner boys for gold marketing. Once a channel is set, it is invariably used for smuggling in arms as well. That is why, gold import duties need to be reduced. Unless that is done, the adverse effects will make the country pay a very high price.
The good delivery bar is to be produced by Indian refiners by adhering to quality standards followed by global benchmark LBMA. IBJA has called for public comments on the draft over the next two weeks. It could incorporate some of these suggestions and submit an updated draft to the government, which is expected to use part of these inputs in formulating a gold policy.
The idea behind a good delivery gold bar is to harness above ground gold held by individuals and temple trusts, refine these into standard quality gold bars, which could be used by banks to sell them to jewellers, etc. The Indian elements in this draft deal with finance and production numbers that relate to the Indian environment.
The quality standards proposed are global and there is no what is gold trading at dubai in indian rupees on that. WGC is also preparing feasibility report for spot exchange for gold, which is likely to be out in a month or two. Trading will be on a nationwide online platform. BSE and commodity exchanges are already deliberating this issue. Some clarity will emerge after WGC comes out with its feasibility study. Please check back for new articles and what is gold trading at dubai in indian rupees at Commoditytrademantra.
So, can the situation be remedied?