World Gold Council's report suggests that the uptake for gold in India for January-March this year was 124 tonnes, up 15 per cent compared with the overall demand for the same period in 2016. The same increase was identified by city-based jewellers when business was dull due to high gold prices and a strike by jewellers.
Managing Director of NAC Jewellers, N Ananthapadmanabhan said that while the demand this year is 10-15 per cent more, business has been average due to competition as more jewellery chains are coming up. He said, “Demand is back and we are not losing out on business, but we are not able to register significant growth.” Even with the rise in demand as compared with the previous year, it still is the second lowest in the five-year time frame from 2013. PR Somasundaram, MD, World Gold Council, India, said, “Gold demand has increased compared to the previous year, but in absolute terms, it is still low. It was close to 190 tonnes in 2015 and 167 tonnes in 2014. In fact, this quarter was the only one among the previous four quarters when jewellery demand went below 100 tonnes.”
Even with, the council has put up a conservative estimate of 650-750 tonnes as the annual demand, expecting the introduction to GST to impact consumer demand. Somasundaram added, “Though the introduction of GST is widely welcomed by organised players, as it seeks to mandate transparency and enhance consumer value, there are concerns about the level of tax. We are putting up a conservative demand considering short-term challenges including PAN registrations, GST and restrictions on cash transactions.”
