This year’s imports are likely to be 725 tonnes, according to the median of responses from 12 industry participants in the poll. The range of responses was between 650 tonnes to 800 tonnes.
India imported 880 tonnes of gold in 2017, according to data compiled by precious metals consultancy GFMS, a division of Thomson Reuters.
A drop in imports from India could weigh on global prices but would help the South Asian country reduce its trade deficit.
Imports in the first five months of 2018 fell 39.4 percent from a year ago to 274.2 tonnes, GFMS said.
“The import numbers are quite weak so far. They are unlikely to improve meaningfully unless prices correct,” said Mukesh Kothari, director at Mumbai bullion dealer RiddiSiddhi Bullions.
In the Indian market, gold futures were trading at about 31,136 rupees ($ 462) per 10 grams on Tuesday, up 7.3 percent from a year ago. That is equivalent to about $ 1,386 per ounce and compares to global prices of $ 1,297 per ounce, though the Indian price includes a 10 percent import tax.
Indian gold futures were at 31,620 rupees in April, their highest since August 2016.
Also reducing demand for gold is the more than 5 percent depreciation of the rupee so far in 2018, which has made gold expensive for local buyers.
Buyers have also sought alternative investments as the equity market has been giving better returns in the last few years, said Surendra Mehta, secretary of the India Bullion and Jewellers Association.
India’s broader NSE index has risen 72 percent since the start of 2014, while gold has risen 9.5 percent during the period.
HOPES ON RURAL DEMAND
Gold demand could improve in the second half of the year because of buying from farmers amid adequate monsoon rainfall and festivals like Dusherra and Diwali, when buying gold is considered auspicious, said a Mumbai-based dealer with a private gold importing bank
However, the dealer added, “It won’t be sufficient to offset the fall in the first half.”
Two-thirds of India’s gold demand comes from rural buyers, who use jewellery as a store of wealth.
The country’s pure gold imports would fall but overseas buying of dore, a semi-pure alloy of gold and silver, could rise, said James Jose, secretary of the Association of Gold Refineries and Mints.
India’s gold dore imports jumped 77 percent in 2017 from a year ago to 250.6 tonnes, according to the World Gold Council, as the country charges lower taxes on dore imports than fine bullion.