สรุปข่าวเศรษฐกิจอินเดียประจำวันที่ 20 มีนาคม 2555

Traders uneasy over gold glut from Thailand

A sharp increase in the import duty of gold has created the possibility of a flood of cheap import of jewellery made of the yellow metal from Thailand. For, there exists a free trade agreement (FTA) between New Delhi and Bangkok that is valid since 2004, permitting import of gold jewellery with duty under one per cent. The pact was signed at a time when there was minuscule import duty on the gold imported to India.

Now, the gold import duty has been increased to four per cent. In fact, with education cess, the figure comes to 4.12 per cent. Thus, importing gold jewellery from Thailand has become cheap, thanks to the FTA. Currently, there is some import of jewellery happening from Thailand, but its magnitude can go up significantly if the difference in duty persists.

Indian jewellers have to pay 4.12 per cent on import of gold, apart from an octroi of 0.1 per cent if the jewellery is imported in Mumbai. Plus, the 2012-13 Budget has proposed a 0.3 per cent excise duty on jewellery. Then there is excise duty, which, when calculated with abatement, comes to 0.3 per cent.

Thailand is not a known jewellery producer. Hence, most of the imports taking place even today are from China and Malaysia, routed through Thailand.

Another consultant to various gold importers says even if jewellery imported from Thailand is not finding buyers in India, melting that into gold and selling it in the domestic market will still make it viable.

(Source: Business Standard, thenational, ZeeNews, smartinvestor.in)

Retail price inflation rises to 8.8% in Feb

Consumer price inflation accelerated to 8.83% in February from 7.65% in January, adding yet another element of uncertainty to prospects of the Reserve Bank of India (RBI) cutting interest rates starting in April, at a time when economists are already worried about the inflationary impact of tax increases announced in the national budget last week.

The increase in retail price inflation, based on the new Consumer Price Index (CPI), comes days after the widely tracked Wholesale Price Index (WPI) reversed its downward trend in February, rising to 6.95% from a 26-month low of 6.55% in January.

CPI is supposed to better reflect price increases borne by people. However, in February, non-food manufacturing inflation, or core inflation, declined to 5.7% from 6.7% in January.

While experts don’t expect RBI to abandon WPI as the primary inflation source, CPI-based inflation data is expected to provide additional inputs to monetary policymaking.

Retail inflation for rural and urban India was 8.36% and 9.45%, respectively. Overall food inflation during the month was 6.33%, while for rural and urban India; it was 7.17% and 6.62%, respectively.

(Source: Moneycontrol, Livemint, Dailymail)

Economic Section

Royal Thai Embassy