India is likely to announce measures to curb gold imports as early as Tuesday, a senior finance ministry source said, as a surge in inbound shipments threatens to worsen the country’s trade deficit.
“We are working on it. The measures to slow gold imports are almost ready and may be announced today or tomorrow,” said the source, who declined to be named because of the sensitivity of the matter.
Gold imports into India, the world’s No. 2 gold consumer behind China, surged nearly fourfold in October to $4.18 billion from a year ago, data showed on Monday.
Although India’s trade deficit has so far been kept in check by lower oil imports, analysts warn that is unlikely to last if inbound gold shipments continue to surge.
Struggling with high current account and trade deficits, India last year raised the import duty on gold to a record 10 percent and imposed other import restrictions, some of which it relaxed in May.
Imports of the precious metal have risen steadily since August, boosted by jewellery demand for the wedding season, raising concerns among policymakers.
Last Thursday, officials from the Reserve Bank of India and the finance ministry met to review the country’s gold import policy, but no decision was taken.