The government in a notice from DGFT has released a mandate according to which the refineries that have been certified by BIS can only import raw gold from June 1st, 2017. There could be an impact of 20% on the gold supply, which would be around 150-250 tonnes annually and will depend on what price the spot gold will trade on.
The non-BIS accredited refineries will now have to decide on to get accreditation as very few refineries have been certified till now. Experts feel that the other way that these refiners may get through is that they could get accredited refiners to import for them as a middle agent for a premium price.
The country imports 700-800 tonnes of gold on an average which also includes the dore gold and the refined gold bars. The center has kept 10% import duty on refined gold but only 8.75% duty is charged on raw gold if imported from excise free zones. This means that the importers getting raw gold will get a profit margin of more than 1% after removing the expenses.