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, 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.
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 government asked state-run companies to pay higher dividends to help narrow the budget deficit as slowing growth threatens to erode revenue, a finance ministry official with direct knowledge of the matter said.
It takes more than an hour to drive the 25 miles of clogged highway linking New Delhi to Noida Special Economic Zone. Inside the gate, a smooth four-lane road leads to electronics, engineering and textile plants that are at the heart of India’s plan to imitate China’s export success.