One of the big 4 important decision to be made from indian PM is reduce gold import duty, as lot of gujarat people (where indian PM was Chief Minister) depends on jewellery business. I bought some today. I am in. Good luck.
Gold curb effect
The previous government had increased the import duty on gold and imposed other restrictions to deal with the current account deficit (CAD), which is the difference between the inflow and outflow of foreign currency. CAD had touched $88 billion in 2012-13. The curbs had brought down yellow metal imports significantly to $32 billion in 2013-14. However, a high duty of 10 per cent and insistence on a minimum export norm before importing gold have hit the gems and jewellery industry. Jewellery exports fell 11 per cent in 2013-14 to $35 billion after having grown at an average of 15 per cent over the last 5 years. With Gujarat being the centre of the gems and jewellery trade, the Modi government will look to tweak the policy. However, it is expected to adopt a cautious approach and go for a staggered duty cut. “As the new government assumes power, the sustenance of CAD at current levels remains a key challenge if it decides to do away, even so partially, with the restrictions on gold imports,” Yes Bank said in a research note.
SLR Price at posting:
39.5¢ Sentiment: ST Buy Disclosure: Held
