India, the second-biggest gold consumer, may ease controls on imports after Narendra Modi’s victory in national elections, according to Bachhraj Bamalwa, a director with the All India Gems & Jewellery Trade Federation.
Returning home to the southern Indian state of Kerala from Dubai last month, 27-year-old welder Mohammed Ahmed Jaffer was arrested after customs agents said they discovered gold in the lining of his brass flower pot.
South Asia, home to a quarter of the world’s population, will probably get less monsoon rainfall than normal this year as odds increase for the emergence of the El Nino weather phenomenon that has previously caused droughts.
Gold imports by India, the world’s largest consumer, are plunging as an increase in tax and restrictions on financing shipments boost costs for jewelers, helping the nation contain a record current-account deficit.
India’s central bank Governor Duvvuri Subbarao may need to raise interest rates as capacity constraints in power and roads and record borrowings fuel inflation, an adviser to Prime Minister Manmohan Singh said.
India plans to unveil measures today to support the rupee as its slump to a record low against the dollar threatens to intensify price pressures and boost the cost to companies of repaying foreign debt.
India’s current-account deficit narrowed to a fresh four-year low as gold imports cooled, offering a potential boost for the rupee even as economists said the gap may widen again if the economy improves.