India's Banks Resume Gold and Silver Imports Amid Economic Concerns

Indian banks have restarted importing gold and silver after reaching a consensus to pay a 3% customs levy that had earlier halted these activities, according to trade and government sources speaking to Reuters.

This move is anticipated to increase India's gold imports, widen the trade deficit, and exert further pressure on the rupee, one of Asia's weakest currencies this year. Concerned about the strain on India's balance of payments, Prime Minister Narendra Modi called on citizens to refrain from buying gold for a year to help protect the nation's foreign exchange reserves.

India's renewed demand, being the second-largest gold consumer after China, may also bolster international gold and silver prices and enable local jewelers to replenish their stock. "We paid a 3% integrated goods and services tax (IGST) at customs to clear shipments," stated the head of the bullion desk at a Mumbai-based private bank. Banks have cleared approximately 9 metric tons of gold and 34 metric tons of silver under the adjusted import conditions.

(With inputs from agencies.)