India hikes Gold,Silver import tariff value [BullionStreet]


NEW DELHI(BullionStreet): World’s largest gold and silver consumer and importer India has again hiked tariff value for gold and silver.

In a joint notification by India’s Central Board of Excise and Customs (CBEC), Department of Revenue and the Ministry of Finance said gold’s tariff value has changed to $531 per ten grams whilethat of silver to $899 per kilogram.

The tariff value, which is released fortnightly, is the base price on which the customs duty is determined to prevent under-invoicing. During May, the tariff value of gold stood at $507 per 10 grams.

In January, the government had changed the duty structure on gold and silver from specific to value-linked, making precious metals more expensive.

At present, import duty on gold and silver stands at 4 per cent and 6 per cent of the value, respectively.

Indian Govt prepares contingency plan for euro zone crisis


The government has prepared a contingency plan for Greece exiting the euro zone and even a collapse of the monetary union, Indian officials said on Tuesday. The euro zone debt crisis has already put a damper on India’s exports to Europe, the biggest destination for Indian goods, as well as capital inflows into equity and debt markets. Prime Minister Manmohan Singh’s government blames Europe’s woes for the slowdown in Asia’s third-biggest economy, although economists say Indian policy inertia is also to blame.


Finance chiefs of the Group of Seven leading industrialised powers will hold emergency talks on the euro zone crisis on Tuesday in what was seen as a sign of growing global alarm over the threat posed by the strains within the 17-nation union.

“Yes, India does have a contingency plan. There are different crisis management groups within the government to deal with such a possible scenario,” Kaushik Basu, the chief economic adviser to finance minister Pranab Mukherjee, told Reuters.

He declined to give details of the plan, but another senior official familiar with the planning said the finance ministry and central bank were prepared to take monetary and fiscal measures if necessary to try to insulate India from the shockwaves of a euro zone collapse.

He did not spell out the measures, but they could include lowering interest rates, which are among the highest in the world, and lowering the amount of money that banks have to keep on deposit in the central bank.

The latter step would allow banks to lend more money to firms to keep hiring and expanding. At the moment the banks are required to keep 4.75% of their deposits with the Reserve Bank of India.

“We are already preparing technical analysis for different possible scenarios that could impact India trade, stock markets and financial institutions,” the finance ministry official said, speaking on condition of anonymity because of the sensitivity of the issue.

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India Gold,Silver import drop 33% to $3.1 billion in April


Exports of gems and jewellery also fell 25.7 percent to $2.6 billion in April and imports of pearls and precious stones slumped by 63.3 percent to $1.2 billion.

NEW DELHI(BullionStreet): World’s largest gold and silver importer India witnessed a sharp decline of these precious metals in April.

According to official figures, imports of gold and silver slumped by 33 percent at $3.1 billion mainly due to industry shutdown in early April.

Exports of gems and jewellery also fell 25.7 percent to $2.6 billion in April and imports of pearls and precious stones slumped by 63.3 percent to $1.2 billion.

Indian jewellers went on 21-day strike protesting the budgetary proposal to levy additional duties on sale of jewellery. Under pressure from various quarters, the government subsequently withdrew that proposal.

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Indian growth weakest in 9 years, rupee slides [Reuters]

By Manoj Kumar and Ross Colvin

(Reuters) – India’s economic growth slumped to its lowest level in nine years in the first three months of 2012, marking a dramatic slide in the fortunes of a country whose economy boasted nearly double-digit growth before the global recession.

“Urgent and bold steps are immediately needed to prevent the economy from descending into a full blown crisis. This must be averted at all costs,” said Rajiv Kumar, secretary-general of the Federation of Indian Chambers of Commerce and Industry.

The economy grew 5.3 percent in the last quarter from a year earlier, a sharp slowdown from 9.2 percent growth in the last quarter of the previous year, government data showed. The figures were the latest confirmation that the slowdown of Asia’s third-biggest economy is deepening.

Finance Minister Pranab Mukherjee blamed the weak data on the poor performance of the manufacturing sector, which shrank 0.3 percent from a year earlier, and promised to take “all necessary steps” to trim the country’s ballooning budget and current account deficits, which are a major drag on growth.

The data was released as the rupee plunged to yet another record low. Adding to a sense of crisis, a general strike called by opposition parties to protest a steep petrol price hike shut down government offices and shops and stalled trains and buses in some of the country’s 28 states.

The poor growth figures will add to mounting pressure on Prime Minister Manmohan Singh’s government to act more decisively and with greater speed to arrest the economy’s slide.

“This is definitely a very important signal for the government – this is a make or break situation for India and the government has to step on the panic button,” said Rupa Rege Nitsure, chief economist at Bank of Baroda in Mumbai.

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India not Caving to the U.S. on Iran [alphavn]

Unlike Turkey and Japan, who have played ball just enough to still be able to buy Iranian oil but avoid U.S. sanctions, India is pretty much moving ahead unilaterally, and publicly, flouting the American’s desire to isolate Iran.

Clearing the way for oil refiners to pay Iran in Indian rupee, the Union Budget has exempted the payments made for crude oil purchased from the Persian Gulf nation, from any local tax.

Iran had in January agreed to accept 45 percent of the value of its oil exports to India in Indian rupees but the scheme could not be implemented due to taxation issues.
It was feared that the money paid to National Iranian Oil Co (NIOC) may be considered as income generated by Iranian firm in the country and liable to be taxed. The withholding tax was up to 40 percent, which neither NIOC nor the Indian refiners wanted to pay.

Turkey continues to play both sides in this moving billions of dollars for the Indians to Iran as an intermediary.  For how long though, apparently is up to the U.S. State Department as Turkey has made it clear that once the pressure gets too high, they will cut India off.

Talks between the U.S. and India began on Monday with this issue front and center in the negotiations.  Given the current climate after the BRICS Summit and this latest move to allow refiners the tax exemption its pretty obvious that India’s stance is quite resolute, a stance the Americans do not generally tolerate from their allies.

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BRICs Bank To Rival World Bank and IMF and Challenge Dollar Dominance [goldcore]

Outgoing President of the World Bank, Robert Zoellick, after just three days ago dismissing the idea of a BRICs created, new global multi lateral bank, has come around and endorsed a BRICs bank in an interview with the FT.

Zoellick had initially said that a BRICs bank and potential rival to the western and U.S. dominated IMF and World Bank, would be difficult to implement given competing BRIC interests.

He acknowledged that a BRICs bank was being created and said that the World Bank supported such a bank. He said that not having Russia and China as part of “the World Bank system” would be a “mistake of historic proportions”.

Leaders of the BRICS nations meeting in India appear to have made much progress in creating a new global bank as the emerging economies seek to convert their growing economic might into collective diplomatic influence.

The five countries now account for nearly 28% of the global economy, a figure that is expected to continue to grow.

On Thursday morning, President Hu Jintao of China, President Dmitry Medvedev of Russia , President Dilma Rousseff of Brazil, President Jacob Zuma of South Africa and Prime Minister Manmohan Singh of India shook hands at the start of the one day meeting in New Delhi.

BRICS leaders, from left, Brazil’s President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma. Photo: AP

Top of the agenda was the creation of the grouping’s first institution, a so-called “BRICS Bank” that would fund development projects and infrastructure in developing nations.

The initiative would allow the countries to pool resources for infrastructure improvements, and could also be used in the longer term as a vehicle for lending during global financial crises such as the one in Europe, officials said.

Less noticed and commented upon is the aspirations of the BRIC nations to become less dependent on the global reserve currency, the dollar and to position their own currencies as internationally traded currencies.

The leaders of BRIC nations and other emerging market nations have adopted the idea of conducting trade between the five nations in their own currencies. Two agreements, signed among the development banks of Brazil, Russia, India, China and South Africa, say that local currency loans will be made available for trade between these countries.

The five fast growing nations participating in local currency trade will allow participants to diversify their foreign exchange reserves, hedging against the growing risk of a euro or dollar crisis.

The BRICS want to have easy convertibility of currency to make it easier to use the real, ruble, rupee, renminbi and rand amongst themselves without having to always use the US dollar. Higher intra-Brics trade, conducted in their own currencies would shield their economies from economic dislocations in the west.

In the long run, if global dependence and exposure to the dollar is to be reduced, then the BRICs currencies will have to trade amongst themselves, creating an intra Brics currency market. This could lead to a special reserve BRICs currency that could rival the IMF’s Special Drawing Rights (SDRs) and in time a regional currency could emerge. However, the EU’s experience of a single currency may make this less likely.

Left unsaid so far is the possibility that one of the BRICs or the BRICs in unison might peg the value of their respective currencies to the ultimate store of value and money – gold.

Having a gold standard enforces a form of fiscal self or national control and does not allow any one nation to have an exorbitant privilege in terms of monetary affairs that can be used in order to further selfish national or national corporate or banking interests.

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BRICS summit videos

The BRICS summit has wrapped up in India. Creating an alternative global lender and stepping away from the dollar as a reserve currency were among their main objectives.






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