• Tuesday, November 29, 2022

Business

India’s gold demand to drop 30%, says Industry Body

An Indian sales assistant arranges gold ornaments during the Hindu festival of “Akshaya Tritiya” at a jewellery shop in Chennai on May 7, 2019. – “Akshaya Tritiya” is considered to be an auspicious day in the Hindu calendar to buy valuables and people generally flock to buy gold on this day in the belief that it will increase their wealth. (Photo by ARUN SANKAR / AFP) (Photo credit should read ARUN SANKAR/AFP via Getty Images)

By: PramodKumar

India’s gold demand will plummet 30 per cent in 2020 from the 690 tones in 2019 due to COVID-19 pandemic, Indian Chamber of Commerce (ICC) has said.

Earlier, it was estimated that gold demand in the country in 2020 will be 700-800 tonnes.

Following the Coronavirus outbreak, the Gems and Jewellery sector in the country has come to a complete standstill as shops are closed across India.

The Industry contributes seven peer cent of GDP and employs more than 5 million people.

Indian Gems and Jewellery industry is predominantly wedding driven. But due to COVID-19 such events have been cancelled and wedding shopping has come to a halt despite the ongoing wedding season. India’s average long-term gold demand is likely around 850 tonnes because of its affinity to gold due to economic and social requirements.

The sector has lot of compliance issues like Advance tax payment, Maturity date of Gold Metal Loan, Interest payment on Gold Metal Loan etc. In light of such a crisis situation, Indian Chamber of Commerce (ICC) appeals to the government for relief measures to help the Industry.

The industry body suggests extension of at least 180 Days for Advance tax payment and roll over of gold metal loans at lower interest rates.

It appealed the Government to allow a 50 per cent reduction on interest rates for term loans and working capital facilities for 180 days instead of 90 days in support of all businesses and also change the definition of Non-Performing Assets to 180 days for the short term.

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