SYDNEY: India´s gold imports could hit a record high this year amid widespread smuggling to sidestep government levies on overseas shipments, Australia and New Zealand Bank, Asia´s biggest shipper of physical gold, said on Wednesday.
The forecast by the bank´s head of precious metals, John Levin, runs counter to tallies that show gold imports in decline in the world´s second-biggest gold market after China.
Levin said he expects 15 percent of India´s gold this year to be "smuggled in" or arrive via "other unofficial channels" to beat a 10 percent levy imposed by the government.
Levin also said more semi-refined gold, known as gold dore, was being imported from overseas mining companies because of a lower government levy.
The import duty on gold dore is 8.5 percent.
"You could see a record amount of gold going into India this year," Levin said, "A lot through unofficial channels and a lot of it going in as semi-refined gold.
"However, industry officials say unofficial imports are also coming down as Indian market prices trade at a discount to the U.S. dollar spot price.
As recently as a few weeks ago, Indian importers were offering discounts as high as $40 per ounce, or nearly 3 percent of the value to attract buyers.
This has been discouraging smugglers as their margins have been squeezed, Daman Prakash Rathod, a director at MNC Bullion, a wholesaler in the southern Indian city of Chennai, said on Wednesday.
Officially, India´s gold imports in the 2015/16 fiscal year that ended on March 31 dropped 16 percent from a year ago to 926 tonnes.
ANZ last year handled about 15 percent of the world´s gold shipments, according to Levin.
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