KOCHI : Even though demonetisation has dented gold demand, the long-term prospects of the yellow metal in India are bright, according the World Gold Council (WGC). By year 2020, gold consumption in the country is likely to touch 850-950 tonnes, WGC says. While the main demand will be for jewellery, bar and coin investment is expected to be 250-300 tonnes by then. Jewellery exports are estimated to touch the $40-billion mark, from $8.6 billion now.
“Gold trade will become more transparent with the introduction of goods and services tax (GST), mandatory hallmarking and a massive push by organised jewellers to promote non-cash payments,” said Somasundaram P R, head of WGC’s India operations, after unveiling the report titled India’s Gold Market -- Evolution and Innovation.
According to WGC, the overall gold demand will average at 650-750 tonnes in 2016. India’s gold demand stood at 441.2 tonnes in January-September of 2016.
Somasundaram says that gold smuggling is expected to be higher in 2016 because of one per cent manufacturing excise tax. As much as 119 tonnes are estimated to have been imported through unofficial channels in 2015. Confirming golden days ahead for the precious metal, Joy Alukkas Group chairman Joy Alukkas told Express that the worst period after demonetisation is over and demand will surely pick up.
“There is no substitute for gold as of now. So, people will start accumulating the yellow metal in the future. The signs of revival are already visible now,” added.
On India’s gold imports, WGC said that in the short term, the removal of some import restrictions will have two main benefits. First, nominated agencies will be better able to source bullion to meet the apparently endless appetite for gold in India. Second, this increased flow will likely make the environment less attractive for unofficial gold imports.
“The silver lining about demonetisation in the gold sector was that cashless transactions have increased bringing in more transparency. South Indian demand will remain intact going forward as well,” said B Girirajan, managing director, Bhima group.
Even though demonetisation has dented gold demand, the long-term prospects of the yellow metal in India are bright, according to the World Gold Council (WGC). By the year 2020, gold consumption in the country is likely to touch 850-950 tonnes, WGC says. While the main demand will be for jewellery, bar and coin investment is expected to be 250-300 tonnes by then. Jewellery exports are estimated to touch the $40-billion mark, from $8.6 billion now.
“Gold trade will become more transparent with the introduction of goods and services tax (GST), mandatory hallmarking and a massive push by organised jewellers to promote non-cash payments,” said Somasundaram P R, head of WGC’s India operations, after unveiling the report titled India’s Gold Market -- Evolution and Innovation.
According to WGC, the overall gold demand will average at 650-750 tonnes in 2016. India’s gold demand stood at 441.2 tonnes in January-September of 2016.
Somasundaram says that gold smuggling is expected to be higher in 2016 because of one per cent manufacturing excise tax. As much as 119 tonnes are estimated to have been imported through unofficial channels in 2015. Confirming golden days ahead for the precious metal, Joy Alukkas Group chairman Joy Alukkas told Express that the worst period after demonetisation is over and demand will surely pick up.
“There is no substitute for gold as of now. So, people will start accumulating the yellow metal in the future. The signs of revival are already visible now,” added.
On India’s gold imports, WGC said that in the short term, the removal of some import restrictions will have two main benefits. First, nominated agencies will be better able to source bullion to meet the apparently endless appetite for gold in India. Second, this increased flow will likely make the environment less attractive for unofficial gold imports.
“The silver lining about demonetisation in the gold sector was that cashless transactions have increased bringing in more transparency. South Indian demand will remain intact going forward as well,” said B Girirajan, managing director, Bhima group.