India’s gold demand to drop 30 per cent, says industry body
FILE PHOTO: An Indian sales assistant arranges gold ornaments during the Hindu festival of "Akshaya Tritiya" at a jewellery shop in Chennai. (ARUN SANKAR/AFP via Getty Images)
INDIA’s gold demand will plummet 30 per cent in 2020 from 690 tones in 2019 due to COVID-19 pandemic, the Indian Chamber of Commerce (ICC) has said.
Earlier, it was estimated that gold demand in the country in 2020 will be 700-800 tonnes.
Following the Coronavirus outbreak, the gems and jewellery sector in the country has come to a complete standstill as shops are closed across India.
The industry contributes seven per cent of GDP and employs more than five million people.
Indian gems and jewellery industry is predominantly wedding driven. But due to COVID-19 such events have been cancelled and wedding shopping has come to a halt despite the ongoing wedding season.
India’s average long-term gold demand is likely around 850 tonnes because of Indian consumers’ affinity to gold.
The sector has lot of compliance issues such as advance tax payment, maturity date of gold metal loan and interest payment on gold metal loan. In light of such a crisis situation, Indian Chamber of Commerce (ICC) appealed to the government for relief measures to help the Industry.
The industry body suggests extension of at least 180 days for advance tax payment and roll over of gold metal loans at lower interest rates.
It appealed the government to allow a 50 per cent reduction on interest rates for term loans and working capital facilities for 180 days instead of 90 days in support of all businesses and also change the definition of Non-Performing Assets to 180 days for the short term.