Key facts
- India's gold imports fell 81% in September.
- Elevated domestic prices and government calls against buying gold contributed to the decline.
- The shift in sourcing routes benefits domestic refiners due to lower tariffs on doré.
- The India-UAE trade pact offers a tariff concession on gold imports through a quota system.
India's gold imports saw an 81% decline in September, a period typically marked by high demand for festivals and weddings. This significant drop is attributed to elevated domestic prices and Prime Minister Narendra Modi's public calls against purchasing the precious metal. Retailers, however, report having sufficient stock to meet seasonal demand. The situation raises questions about the potential impact of reduced demand from the world's second-largest gold market on global bullion prices.