Over the past year and a half P. Chidambaram, India’s finance minister, has been fighting his country’s insatiable appetite for gold.
Gold import duties have risen tenfold—from 1% at the start of 2012 to 10% today.
Excise duties now stand at 9% while new rules such as strictly cash only for imports and transaction taxes, among other punitive measures, have stymied India’s gold industry.
Some of the anti-bullion measures are now being lifted.
The $300-million Reliance Gold Savings Fund, India’s third-largest gold-backed investment fund, will now accept fresh investments again after a 12-week hiatus.
The fund suspended sales in support of the Indian finance ministry’s efforts at the beginning of August.
Part of billionaire Anil Ambani’s Reliance Capital empire, the fund cited a stronger rupee and a better economic picture as reasons behind the reopening.
India’s gold-backed ETF industry is tiny compared to the U.S. and Europe, with the 14 funds’ assets under management totalling only around $1.7 billion.
Within the larger context of the Indian gold trade, Reliance’s move may not be such a big deal, but the reopening of the fund does show some confidence is creeping back into the Indian gold investment market.
Reprinted by permission of Mining.com