Indian Gold Book:Indian Gold Book - Gold Bars Worldwide

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14 Background Role of Indian Government Orientation Gold bullion Gold jewellery Industrial gold usage Mumbai gold prices Pricing and profitability Gold mining and exploration Gold supply and demand 1990 – 1997 (growth period) 1998 – 2001 (static period) Above ground stocks of gold CHAPTER 1 SUMMARY AND POSITIVE FINDINGS CONTENTS Gold jewellery demand over the next 10 years Market features Positive findings Gold coins and net bar hoarding over the next 10 years Market features Positive findings Industrial gold usage over the next 10 years Importance of the Indian gold market Photograph: Tribhovandas Bhimji Zaveri Gold jewellery is owned as an “adornment” for cultural, status and decorative reasons. It is also owned as an “investment” for store of value, savings and money purposes. For most consumers, the motivations are intertwined. AN INTRODUCTION TO THE INDIAN GOLD MARKET
SUMMARY AND POSITIVE FINDINGS BACKGROUND ROLE OF INDIAN GOVERNMENT The Indian Government closely monitors the import, export, distribution, fabrication, retailing and private ownership of gold – as it has done since 1947. For 27 years (1963 – 1990), Gold Control Rules and the Gold (Control) Act regulated the domestic market. Private gold ownership was restricted to jewellery (and coins already in circulation). Owning bars became illegal. Jewellery fabricators and retailers required licences to operate. Almost all bullion dealers stopped trading – at least officially. To fabricate new jewellery, the gold industry was obliged – theoretically – to rely entirely on the recycling of old gold scrap. Since the repeal of the Gold (Control) Act in 1990, the Government has adopted pragmatic policies designed to increase the share of official (as opposed to unofficial) gold imports, optimise its revenue from Customs duty, stimulate the export of gold jewellery, improve the overall quality of gold jewellery fabricated in India, and encourage the recycling of gold jewellery in private hands, notably through the Gold Deposit Scheme. Important initiatives include the introduction of official gold import schemes, notably the Non-Resident Indian (NRI) Scheme in 1992 and the authorisation of banks in 1997, the Gold Deposit Scheme in 1999, the hallmarking initiative in 2000, and on-going support for gold jewellery exporters. Customs duty on imported gold is currently Rs 250 per 10 g (US$ 16 per oz). Since 1992, it has generated approximately Rs 106 billion (US$ 2.6 billion). Official gold reserves have increased from 216 tonnes (1970) to 358 tonnes (2001). ORIENTATION India comprises 28 States, 6 Union Territories (UT’s) and Delhi as the National Capital Territory (NCT). It is bordered by 6 countries: Pakistan, Nepal, China, Bangladesh, Bhutan and Myanmar. The population has grown by 20% since 1991 to 1,012 million. The report groups the States into 4 regions. The north accounts for 30% of the population. The west, east and south each account for approximately 22 - 25%. There are more than 700 languages and dialects. 12 languages are important. Hindi is spoken as a primary and secondary language by 65%, English by 20%. The split by religion is Hindu (82%), Muslim (12%), Christian (2.3%) and others (3.7%). The rural population (742 million) accounts for 71% of the population. Urbanisation is gradual. The urban proportion grew from 26% in 1991 to 29% in 2001. There are more than 30 cities with populations exceeding 1 million. Gold demand relies heavily on the agricultural sector. Most of the 107 million farms are small. The average size is 1.6 hectares. Only 1.7 million farms (1.6%) are 10 hectares or more. 60% of agricultural workers are employed fulltime or part-time as hired labourers. Their daily wages range from Rs 50 (US$ 1.00) to Rs 200 (US$ 4.00) For all States, good rainfall during the monsoon is important. Only 38% of the gross cropped agricultural land is irrigated. The South West monsoon occurs over a 3 month period (June to early October). Excess rain can cause severe flooding, and too little rain can cause droughts, in vulnerable States. GOLD BULLION Imported gold bars More than 95% of gold imported for the domestic market is in the form of small cast bars weighing 10 tolas (3.75 oz), widely known as TT bars or biscuits. Most imported TT bars are produced by 8 major gold refiners in Switzerland, South Africa, United Kingdom and Australia. In recent years, India has imported 5 - 6 million TT bars annually. Importers The official import of gold bullion for the domestic market occurs through two authorised Government schemes: Open General Licence (OGL) scheme since 1997, and the Non-Resident Indian (NRI) scheme since 1992. The OGL scheme (20 banks and 4 Public Sector Undertakings are authorised) accounted for 99% of official imports in 2001. Gold is also imported unofficially. Bullion re-export centres for the Indian market include Dubai, Singapore and Hong Kong. Since 1990, an estimated 5,246 tonnes have been imported officially and unofficially. In 2001, the OGL share of total imports was about 90%. 10 international gold dealers, members of the LBMA, supply the bulk of imported gold. Duty-free gold is also imported officially for re-export as jewellery. An additional 363 tonnes have been imported since 1990 for this purpose. 54 tonnes were imported in 2001. Imported gold is distributed nationwide through secondary and lower tier bullion dealers that fall below the primary tier of bank and PSU importers. The most important dealers are located in cities where the State sales tax is low. Notably, Ahmedabad, Jaipur, Mumbai and Gurgaon, near New Delhi. AN INTRODUCTION TO THE INDIAN GOLD MARKET 15
Page 1 and 2: AN INTRODUCTION TO THE INDIAN GOLD
Page 5 and 6: INDUSTRY SUPPORT MAJOR SPONSOR CORP
Page 7 and 8: PREFACE An Introduction to the Indi
Page 13 and 14: ACKNOWLEDGEMENTS GIR FIELDTRIPS GIR
Page 15: Raman Jethi Ramchand Popley Ramesh
Page 19 and 20: SUMMARY AND POSITIVE FINDINGS To ma
Page 21 and 22: SUMMARY AND POSITIVE FINDINGS The a
Page 23 and 24: SUMMARY AND POSITIVE FINDINGS POSIT
Page 25 and 26: SUMMARY AND POSITIVE FINDINGS INDUS
Page 27 and 28: ROLE OF INDIAN GOVERNMENT The India
Page 29 and 30: ROLE OF INDIAN GOVERNMENT The Depar
Page 31 and 32: ROLE OF INDIAN GOVERNMENT OFFICIAL
Page 33 and 34: ROLE OF INDIAN GOVERNMENT In summar
Page 35 and 36: ROLE OF INDIAN GOVERNMENT GOLD CONT
Page 37 and 38: ROLE OF INDIAN GOVERNMENT LICENSED
Page 39 and 40: MAP OF INDIA There are 28 States, 6
Page 41 and 42: POPULATION URBAN AND RURAL State Mi
Page 43 and 44: POPULATION HOUSEHOLDS - SPLIT BY SO
Page 45 and 46: ECONOMIC INDICES STATES - INDICATIV
Page 47 and 48: AGRICULTURE VALUE OF AGRICULTURAL O
Page 49 and 50: AGRICULTURE MAJOR CROPS - NORMAL AR
Page 51 and 52: MONSOONS PERFORMANCE OF SOUTH WEST
Page 53 and 54: IMPORTED GOLD BARS The 10 tola bar
Page 55 and 56: IMPORTED GOLD BARS 10 TOLA BARS AGR
Page 57 and 58: IMPORTED GOLD BARS GOLD WEIGHT CONV
Page 59 and 60: The fine gold content of a London G
Page 61 and 62: BULLION IMPORTERS UNOFFICIAL IMPORT
Page 63 and 64: BANKS IMPORTED BULLION PRODUCTS Ban
Page 65 and 66: WHOLESALING TO DOMESTIC BULLION DEA
Page 67 and 68:
BANKS BACKGROUND INFORMATION ON BAN
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BANKS GOLD CELL BRANCHES Region/Sta
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GOLD DEPOSIT SCHEME DISTRIBUTION Th
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GOLD DEPOSIT SCHEME The State Bank
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PUBLIC SECTOR UNDERTAKINGS BRANCHES
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Region/State City MMTC HHEC STC PEC
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NON-RESIDENT INDIAN (NRI) GOLD IMPO
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BULLION DEALERS A secondary tier bu
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GOLD REFINERS SMALL REFINERS There
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COIN FABRICATORS Corporate gifts Al
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COIN FABRICATORS A bullion dealer t
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BAR HOARDING Some trade entities in
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BULK DELIVERY OF OFFICIAL GOLD IMPO
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BULK DELIVERY OF OFFICIAL GOLD IMPO
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PERSPECTIVE INDIA The gold jeweller
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GOLD JEWELLERY PRODUCTS Handmade je
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REGIONAL JEWELLERY STYLES KOLKATA K
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REGIONAL JEWELLERY STYLES AHMEDABAD
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REGIONAL JEWELLERY STYLES SWAMI JEW
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JEWELLERY FABRICATORS All centres,
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JEWELLERY FABRICATORS JEWELLERY WHO
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TRADITIONAL JEWELLERY RETAILERS Sta
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TRADITIONAL JEWELLERY RETAILERS Coi
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TRADITIONAL JEWELLERY RETAILERS ANT
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TRADITIONAL JEWELLERY RETAILERS Man
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ADORNMENT DIMENSION Gold jewellery
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GOLD JEWELLERY CONSUMERS MARRIAGES
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GOLD JEWELLERY CONSUMERS Among larg
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GOLD JEWELLERY CONSUMERS RURAL VERS
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GOLD JEWELLERY CONSUMERS Gold jewel
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GOLD JEWELLERY CONSUMERS INDICATIVE
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LUNAR CALENDAR Mumbai (Maharashtra)
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BRANDED JEWELLERY RETAIL CHAINS DIS
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Region/State Gili Tanishq Carbon In
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HALLMARKS In accordance with BIS pr
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HALLMARKING Most jewellery in the W
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SOURCES OF GOLD BULLION Jewellery e
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Location US dollars in millions % S
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Plain gold jewellery Location US$ m
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INDUSTRIAL GOLD USAGE Since the rep
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INDUSTRIAL GOLD USAGE IMITATION GOL
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MUMBAI GOLD PRICES Indian gold pric
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MUMBAI GOLD PRICES INDICATIVE DIFFE
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MONTHLY 2000 - 2001 2000 MUMBAI LON
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PRICING AND PROFITABILITY Bank impo
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Recycling of old gold scrap and bar
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JEWELLERY WHOLESALERS Jewellery who
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Hallmarking charges The few hundred
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PRICING AND PROFITABILITY MINTED CO
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GOLD MINING AND EXPLORATION For 36
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Year Tonnes Year Tonnes 1970 3.241
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GOLD SUPPLY AND DEMAND Movements in
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GOLD SUPPLY AND DEMAND The trade at
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For the domestic market 1990 - 2001
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GOLD SUPPLY AND DEMAND INDICATIVE G
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GOLD SUPPLY AND DEMAND INDICATIVE A
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WORLD GOLD COUNCIL The World Gold C
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WORLD GOLD COUNCIL TRADITIONAL GOLD
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WORLD GOLD COUNCIL LOCAL FESTIVALS
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WORLD GOLD COUNCIL YOUNGER GENERATI
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Indian Overseas Bank Precious Metal
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REFINERS AND COIN FABRICATORS WEST
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BIBLIOGRAPHY Agricultural Statistic
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ABOUT GRENDON INTERNATIONAL RESEARC
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