Tuesday, 19th July 2005 (2929 views)

Plans to relax import rules for gold into India have met with mixed responses from traders.

The Indian government is to implement plans to ensure a steady supply for consumers in a country which uses around 800 tonnes of gold every year.

India's appetite is expected to sharply increase in a month with the start of festivals that fuel buying in the world's top market.

To meet this spike in demand, nearly 75 per cent of gold in the country is to be imported from abroad.

However, the relaxation of import barriers faces resistance from traders who say the move could lead to more profiteering and money laundering in the country.

They argue that there should be a strict list of authorised agents and that only the members of the London Bullion Market Association, not its associate members, should be allowed to supply gold.

Some believe that opening the market up to free trade will help satisfy the demand for the metal and promote healthy competition in the market.

Reuters quotesthe finance ministry as saying: "The concerned number of authorised importers should be expanded beyond the current designated agents so that there is adequate supply in the market."

 

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