India is going to increase gold imports in 2014

India's gold imports could rise to 200 tons in the second half of 2014 if the government cuts its import duty on gold to 6 percent from a record 10 percent of the budget, said Gems and Jewelry Trade Federation Director of India. Reducing the import duty on gold to 6 percent is reasonable and likely to revive the precious metal industry, the Federation said.

India's Finance Minister Arun Jaiteli is very positive on this issue and would like to bring some good news for the industry in the upcoming budget, jewelers said. According to the report, during the monsoon season, the gold mining industry was unable to seduce rural clients as nearly 60 percent The demand for gold comes from rural India, where more than half of the country lives, which is at least 1.2 billion people.

Last year, the government introduced an 80:20 export-to-import ratio and high import duties to curb the country's rapid current account deficit. Under the 80:20 scheme, the government allowed the nominated agencies to import gold on the condition that 20 percent of the imported gold shipment must be exported.

At the same time, the largest financial company Muthoot proposed a new lending scheme for gold purchases. The scheme is called “Muthoot Loan Advantage” and offers loans up to 75 percent of the value of gold at an 18 percent initial interest rate. The new loan scheme will benefit all clients in nearly 4,500 branches across India. The scheme is part of the company's vision of expanding financial services to remote corners of the country. Muthoot also called on the government to use the scheme as a lending mechanism for priority sectors.