India's gold appetite drops to a decade's low

Mumbai: India, the world's biggest consumer of gold after China, imported its lowest monthly volumes in at least a decade after curbs to control the coronavirus pandemic grounded air transport and shuttered jewelry stores.

Overseas purchases slumped 99.5 per cent to 60 kilograms in April from 13 tonnes a month ago. That would be the lowest monthly inflow in records going back to 2010, according to data available with Metals Focus Ltd.

"I don't expect a recovery in imports or demand for the next three to five months at least," Chirag Sheth, a consultant at London-based Metals Focus, said. Manufacturing in the sector will also take a hit due to a scarcity of workers, who have returned to their hometowns after the virus outbreak, he said.

A nationwide lockdown, which has been in place since March 25, has rippled through the country's economy hitting incomes, jobs and shuttering many industries including airlines, and gems and jewelry.

Imports were negligible in April as most of the country's imports are typically shipped by air, with a smaller volume coming via land from either Bangladesh or Nepal, said N. Anantha Padmanaban, chairman of the All India Gem and Jewellery Domestic Council. He estimates imports will halve this year to about 350 tonnes.

Most jewelry stores across the country continue to be closed in what is turning out to be one of their longest shutdowns ever. "The worst part is even if we open our stores, who will come to buy?" Padmanaban said. "They will question if it is very much required to exchange or buy jewelry or it is safer to be at home?"