NEW DELHI (AFP) – Leading gold buyer India has announced it has eased controls on imports of the yellow metal after its current account deficit narrowed sharply.
India, the world’s second-biggest gold buyer after China, imposed the import restrictions last year to avert a trade deficit crisis that pushed the rupee to record lows.
“Restrictions placed on import of gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on its website Saturday.
The so-called 80:20 import rule meant 20 per cent of all imported gold had to be exported before any new shipments could be brought in.
Jewellers use the gold and make it into jewellery for export.
“The falls in gold and more significantly oil prices over the past few months have substantially reduced India’s import bill,” said research house Capital Economics analyst Shilan Shah.
“Even if India’s gold imports now pick up, the threat of the current account deficit ballooning to previous levels is slim,” Shah said.