India Gold Imports Surge

February Indian Gold Imports Show Signs of Renewed Demand.

Indian gold imports of 89.152 tons rose 65% in February from January imports of 53.878 tons.

February 2017 Indian gold imports were up 148% from 36 tons in February 2016.

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Indian Gold Imports

February Indian gold imports were 89 tons, a 65% increase from January and a 148% increase from 36.4 tons in February 2016.

Indian Gold Imports January-February 2017

Indian gold imports by month 2016 -2017

Indian gold imports were 582 tons (approximately 18,711,734 ounces) in 2016 down 38.7% from 949 tons (approx. 30,511,058 ounces) in 2015. December gold imports of 53 tons (approximately 1,703,989 ounces) were down 35.4% from December 2015 gold imports of 82 tons (approximately 2,636,361 ounces)

Last year we released a survey of India and Gold that covered supply and demand in that country and India’s historical affinity for gold. Indians love gold but their government hates that they love it.

Update on India’s War on Cash Gold

  • Demonetization Not Going as Planned
  • More cash has been turned in than expected, meaning they are flushing out less “black money’ than expected. (or the crimminals managed to find ways to exchange their currency)

  • Anger at Bankers
  • Long lines have been reported throughout India and tempers have often flared. One bloomberg report told of Mobs locking up bankers on cashless payday in India

  • Higher, then Lower Sales, the a Rebound

    Gold sales spiked 23X from the day before on the night that Modi made his demonetization announcement. The Economic Times of India reported that in the two days following that announcement 15 tons of gold were sold!

    Gold sales, however, soon fell off as Indians lacked the cash to buy gold, with gold sales falling nearly 90%. Gold sales at the start of 2017 have rebounded indicating some pent up demand.

    In early 2017 as cash became more available in India, gold demand and the ability to meet it increased.

  • Indian Gold Imports Rose in November 2016, then crashed in December, leveled off in January 2017, rose in February
  • Gold imports in December projected to be cut in half; estimates show a 46% drop to 56.9 tons.

  • Renewed Push (unsuccessful) to Join the Gold Monetization Scheme and to Declare Gold Ownership
  • The Indian government has given renewed push to it gold monetization scheme according to the Economic Times of India “offers good interest and also waiver of capital gains tax on appreciation in the value of gold deposited. So, it makes sense to convert one’s gold hoard to these gold deposits, especially if it is held in bullion form.”

    Just 6,410 kiograms of gold has been “monetized” or 6.41 tons out of approximately 20,000 tons of gold held by Indian households. As such the Narendra Modi government cuts FY18 gold scheme target by 50%.

    The Indian government is also encouraging declarations of gold holdings. If people declare their gold on their income tax it helps the Indian government know how much gold is in the country, and provides a defense against any raid and confiscation of gold that it was properly purchased. The Indian government is fully aware of the attempt to launder rupees with gold.

  • Indian Government Issues Clarifications
  • The Indian government dismissed a rumor that it has no plans to ban gold ownership and clarified its tax position on gold ownership by saying there would be no tax on ancestral jewelry or gold purchased from disclosed income

  • Indian Government Floating Lowering The Gold Import Duty from 10% to 6%.
  • India now discussing raising the tax further. In addtion to the 10% gold import duty, Indians pay 1% VAT and 1% excise tax on gold.

  • India considering re-opening colonial era gold mine

Some suspect that gold’s woes will turn into silver’s gains. Further background on India and silver

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Indian gold imports have fallen sharply in 2016. Higher gold prices and the Indian government’s anti-gold policies are to blame for the reduction in Indian gold imports, which are a proxy for Indian gold demand as India does not have any significant domestic gold mining output.

Since February, gold has been quoted at a discount due to low demand and high prices. As the Diwali and Indian wedding season kicked off in October, however, gold discounts began to disappear and in same cases small premiums were reported.

According to Indian Ministry of Commerce and Industry, gold imports to India were just 34 tons in February, the lowest amount since December 2014. Gold imports fell to 24.1 tons in March the lowest since September 2013. Gold imports rose to 31 tons in April but were about 50 tons lower than last April. After falling in the spring, gold imports from May through September remained at low levels (see charts below).

As a result of the Indian government actions outlined below, Indian gold imports felln approximately 43% through September compared to the first nine months of 2015. Through October 2016, Indian gold imports were 419 tons (approximately 14.779 million ounces). During the comparable period in 2015 gold imports were 737 tons (approximately 26 million ounces).

By year end with December 2016 sales down 35.4% from December 2015 sales, overall 2016 sales were down nearly 40% from 2015.

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Indian Annual Gold Imports 1999 – 2017

Indian gold imports 1999 - 2017 through February

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Indian Monthly Gold Imports 2014 – 2016

Indian Gold imports August 2014 December 2016

While Indian gold imports rose month over month in November after India demonetized its currency, they are down significantly from last year.

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Import Duties

A ten percent duty on gold since 2013

Despite increased demand, Indian gold imports have been hampered by government action. India has placed import duties on gold in order to slow the amount of gold coming into the country. The government’s stated reason for curbing gold imports is that it throws off their balance of trade with imports exceeding exports due to large gold imports.

India has no significant gold mines, so the country’s entire gold demand has to be met either from gold already in the country or by imports. Efforts to get India’s gold mining industry going have met with lots of red tape and very little production. An Australian Indian venture was recently announced that aims to restart an old gold mine that might provide India with a few tons of domestic supply.

Gold Monetization Scheme

The government hopes not only to stop gold from coming into India, but to get Indians to turn their gold in to the government in exchange for interest bearing bonds. The scheme launched in late 2015 so far has yielded little gold from Indian citizens. A couple of temples in India have, however, agreed to turn some of their gold in for the interest bearing bonds. For more on India’s gold monetization scheme click here.

Sales Tax

Earlier this year the Indian government imposed a 1% sales tax on gold that immediately prompted jewelers across the country to go on strike. As of mid April, half of India’s jewerly stores were closed even though the strike was called off. The Indian government has refused thus far to lift the 1% tax. Rather, earlier this month, the Indian government exempted smaller jewelers from the 1% tax.

Additional Duty on Indians Returning From Abroad

In April 2016, the Indian government imposed an additional 15% duty on gold and silver for Indians returning home after one year abroad.

India’s Foreign Reserves

India’s foreign reserves have grown in recent years and reached an all time high of nearly $360 billion as of April 2016, or about the size of Russia’s foreign reserves.

India’s Gold Reserves

As of April 1, 2016, India’s gold holdings were 5.5% of its total foreign exchange reserves, down from 9.2% in September 2011. The percentage decrease is due in part to the increase in India’s overall reserves, the decline in the price of gold and because India has not added any gold to its reserves in recent years. India holds 557 tons of gold as reserves. Russia, in contrast, with overall foreign reserves about the same size as India’s, holds nearly three times that amount.


According to the World Gold Council, as of December 2016, India held the tenth most gold of any nation.

The Indian gold import charts are derived from data pulled from the Indian Ministry of Commerce and Industry, Govt. of India by Nick Laird of Sharelynx and are updated monthly and archived on

Click to see an overview of India and Silver and a 2016 Indian silver importse .

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