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India Folds On Gold Excise Tax: Indian Gold Restocking Imminent

Tyler Durden's picture


Back in March India did a quick flipflop on its then announced Cotton export ban following complaints by China and domestic trade groups, which created quite a stir in the cotton market, first sending it soaring then plunging on supply concerns. This was promptly followed by another misguided attempt to control and benefit from the price of a key commodity, in this case gold, when the country announced it would impose an excise tax on gold jewelry, sending its gold merchants into a nationwide strike. This did not last long either and a few days later, merchants cancelled their strike following promises form the government that too would be promptly overturned. Sure enough, the excise tax has been officially withdrawn, and the biggest source of gold demand is set to see gold imports unleashed once again.

Bloomberg explains:

India, the world s largest bullion importer, has withdrawn the excise duty on precious metals jewelry, Finance Minister Pranab Mukherjee said today.


Jewelers closed stores for three weeks in March in the longest-ever strike, after Mukherjee doubled import levies on gold and imposed a 1 percent excise duty on non-branded ornaments. The stoppage ended on April 6 after the government assured jewelers that their concerns would be considered. The strike cost the industry about 200 billion rupees ($3.9 billion) in lost revenue, according to the All India Gems & Jewellery Trade Federation.


The tax removal may boost demand in India, increasing imports and bolstering global gold prices after they climbed 4.9 percent this year. Bullion is advancing for a 12th year as Europe s debt crisis and concern that global growth is slowing has fueled demand for wealth protection.


The Finance Minister has understood our problems and removed the tax on both branded and unbranded jewelry,  said Bachhraj Bamalwa, chairman of the All India Gems & Jewellery Trade Federation.


Demand should recover from now and imports will improve as jewelers who had not stocked up earlier will start buying.

How big is Indian demand in perspective? In a word: huge.

In a non-bizarro world more demand would mean higher prices. Alas, we have not been in one of those for the past three years so what more demand means under central planning when met with comparable paper supply is anyone's guess...


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Mon, 05/07/2012 - 10:20 | 2403232 DeltaCharlie
DeltaCharlie's picture

Looks like that meeting with Clinton didn't go down too well then? 

Mon, 05/07/2012 - 10:21 | 2403236 SilverTree
SilverTree's picture

Diwali Bitches!

Mon, 05/07/2012 - 10:26 | 2403241 Think for yourself
Think for yourself's picture

24k Au, bitchez!

To be fair, if I had an indian bride like those in the adds, I'd do my best to coat her in gold too

Mon, 05/07/2012 - 11:03 | 2403357 Manthong
Manthong's picture

Wise move.

A step in the direction of future prosperity and security for that nation.

We should pay heed to the thought process behind that.

Mon, 05/07/2012 - 13:10 | 2403250 GetZeeGold
GetZeeGold's picture



They took the whole Cherokee Nation
And put us on this reservation
Took away our ways of life
The tomahawk and the bowie knife


Oh wait.....wrong Indians.


Mon, 05/07/2012 - 10:23 | 2403238 Pladizow
Pladizow's picture

I like my gold, vindaloo!

Mon, 05/07/2012 - 10:25 | 2403246 francis_sawyer
francis_sawyer's picture

I'm sure they laughed that bitch right off the peninsula...

Mon, 05/07/2012 - 10:38 | 2403284 Dr. Engali
Dr. Engali's picture

Can a shemale be a bitch?

Mon, 05/07/2012 - 10:40 | 2403289 Nussi34
Nussi34's picture

Such a fuss about a 1% tax?

Mon, 05/07/2012 - 10:21 | 2403234 TheCanimal
TheCanimal's picture

As a true believer, it's hard to continue to buy gold and silver stocks or physical as it continues to erode.

Mon, 05/07/2012 - 10:25 | 2403243 SilverTree
SilverTree's picture

Well, I guess you really are not a true believer then are you?


Physical, nothing more.

Mon, 05/07/2012 - 10:39 | 2403282 Think for yourself
Think for yourself's picture

With the energy corp nationalization in Argentina and Bolivia in the the last 2 weeks, I wouldn't wait much before stacking...

Mon, 05/07/2012 - 13:13 | 2403881 Snake
Mon, 05/07/2012 - 10:24 | 2403244 Pladizow
Pladizow's picture

Well then you're not a "true believer".

Mon, 05/07/2012 - 10:27 | 2403249 francis_sawyer
francis_sawyer's picture

Don't tell me you're trying to become 'civilized'!

Mon, 05/07/2012 - 10:32 | 2403253 LawsofPhysics
LawsofPhysics's picture

Then you are not a true beliver.  The truth is gold is not an investment, it is a store of value when times are bad to be purchased when times are good (and gold is cheap).


By low, sell high, not the other way around.  Moreover, it is about a physical store of value, a lifepreserver when every paper promise goes bye-bye.

Mon, 05/07/2012 - 10:35 | 2403272 fonzannoon
fonzannoon's picture

Hey LOP you seem to make it very clear in your posts that the time to buy gold seems to have passed. Or am I misunderatanding your point?

Mon, 05/07/2012 - 10:44 | 2403294 LawsofPhysics
LawsofPhysics's picture

I would wait for now.  I see some potential for a cheaper price moving forward as operation twist comes to an end.  ZIRP is a problem for the central banks and the western world.  Something has got to give as commen sense should tell you that there is always a cost associated with creating capital.  Printing is all they have left, period.  The only other option is a massive deflationary spiral that will destroy every central bank on the planet.  It's that or WWIII.  Looking at the history of central planning and fractional reserve banking (now over 100+years) one sees that there really are only two options;  massive inflation or war.  Deflation is never allowed, period.

Mon, 05/07/2012 - 10:51 | 2403313 fonzannoon
fonzannoon's picture

Fair enough, and I am not trying to pin you down to making some sort of call. I guess what I am asking you is, for people out there who did not get in when you did, or are not in at you think it is a bad idea for them to be buying at these prices?

Mon, 05/07/2012 - 11:15 | 2403394 LawsofPhysics
LawsofPhysics's picture

"do you think it is a bad idea for them to be buying at these prices?"

That would depend what your expenses and revenues are.  So long as your have the paper, I always favor buying anything of physical value over holding paper in the long run.  Ask yourself "can I afford it" (Duh) then think about this - lose 20-30% during heavy manipulation in gold or lose 80% in paper when the haircuts and sovereign defaults come.  Again I hate paper in these times and like physical assets.  Especially assests that generate their own revenue (of which gold is not one).  I will be buying some more silver at these prices.  I don't see gold coming down too much more and I see the gold silver ratio correcting in 2013 or as soon as the issue of reserve currrency status heats back up.

Mon, 05/07/2012 - 10:46 | 2403257 Comay Mierda
Comay Mierda's picture

"true believer"

buying gold and silver is not a religion.  its common sense.  do you believe that the sun rises in the east and sets in the west?

better question - do you believe politicians/central banks will stop printing money?

Mon, 05/07/2012 - 11:52 | 2403549 DeltaCharlie
DeltaCharlie's picture

Hear, hear! 

Not gold, buy buying Jerkshire Hathaway is... and Warren Buffet is the Messiah. 


Mon, 05/07/2012 - 10:30 | 2403260 IAmNotMark
IAmNotMark's picture

I just checked.  My physical isn't eroding at all.

Oh...I get it, you mean the price!  That's not erosion...that's a sale! 

Right now, the price of gold only affects what I pay.  I'm not a seller, I'm a buyer.

Mon, 05/07/2012 - 10:32 | 2403269 Seize Mars
Seize Mars's picture


Mon, 05/07/2012 - 12:25 | 2403685 Bad Lieutenant
Bad Lieutenant's picture

crafty and beautiful post. 

assuming your name is mark, love your username btw.

Mon, 05/07/2012 - 10:32 | 2403266 GMadScientist
GMadScientist's picture

Don't worry, you can laugh at them later when you're buying at $1400 in the deflationary spiral and they're out of powder due to their 'early fervor'.

Young bull: Let's run down there a fuck a cow

Old bull: Let's walk down and fuck em all

Mon, 05/07/2012 - 10:50 | 2403283 LawsofPhysics
LawsofPhysics's picture

Considering the dollar-cost average on my gold is under $300, it might be a while.  Like I said, you buy gold when times are good (and gold is cheap).  

If you really think that The Fed and the world's cenral bankers are going to allow a deflationary spiral (without WWIII) that will get gold back under even $1,000 an ounce, I'd say you have bigger mental issues.  Not going to be allowed to happen, period.

While that kind of deflation would be great for savers, retirees, and productive income earners it is bad for TPTB and all of the banks in the world.  Again, look at history, NOT GOING TO BE ALLOWED TO HAPPEN.  Wake the fuck up already.  Think about what would have to happen to interest rates, again not going to happen. (at least not without WWIII).


FYI- the bull quote you are citing implies patience because the older bull takes his time and makes wise investments that pay off many years  later.

Mon, 05/07/2012 - 10:56 | 2403331 GMadScientist
GMadScientist's picture

$1640 -> $1400 is only a 15% dip.

You think you're the only person that bought gold in the 90s?!


Mon, 05/07/2012 - 10:59 | 2403339 gmrpeabody
gmrpeabody's picture

I think the old bull wants to save his energy for the matters at hand.

Mon, 05/07/2012 - 11:15 | 2403415 LawsofPhysics
LawsofPhysics's picture

Yes, plus many old bulls got together and developed viagra, now that was a productive use of capital.

Mon, 05/07/2012 - 10:36 | 2403277 Dr. Engali
Dr. Engali's picture

Is that you Robo?

Mon, 05/07/2012 - 11:00 | 2403350 Money 4 Nothing
Money 4 Nothing's picture

He sold out at $1180.00 didn't he? Damn shame tart trader.

Mon, 05/07/2012 - 10:37 | 2403278 SeverinSlade
SeverinSlade's picture

What's changed?  Absolutely nothing.

Will central banks continue to devalue all fiat currencies?  Yes.

Will politicians ever stop running up sovereign debt?  No.

Why the fuck do you care about the price of gold and silver priced in TOILET PAPER?

Mon, 05/07/2012 - 17:42 | 2404809 kill switch
kill switch's picture

A rare find!!!! You get it..

Mon, 05/07/2012 - 10:23 | 2403237 LULZBank
LULZBank's picture

... trust Gold prices to go down.

Mon, 05/07/2012 - 10:22 | 2403239 LawsofPhysics
LawsofPhysics's picture

Damn that barbarous relic. 

Mon, 05/07/2012 - 10:25 | 2403240 Think for yourself
Think for yourself's picture

edited out - if your words wouldn't improve on the silence, keep them for yourself

Mon, 05/07/2012 - 10:27 | 2403252 judejin
judejin's picture

silver futures will start trading in shanghai this thursday.

it will probably open high then trend lower throughout the day.

Mon, 05/07/2012 - 11:06 | 2403366 Badabing
Badabing's picture

"silver futures will start trading in shanghai this thursday"

when they started trading gold it stoped the nightly runup.

Now for 24 hour silver price control, sell that paper and buy that phyisical!

Mon, 05/07/2012 - 10:29 | 2403258 GMadScientist
GMadScientist's picture

Woohoo...long Tomaz SA and Malaga!


Mon, 05/07/2012 - 10:31 | 2403263 fredquimby
fredquimby's picture

$1636.20 #gogogadgetgold



Mon, 05/07/2012 - 10:58 | 2403337 Money 4 Nothing
Money 4 Nothing's picture

$159x.00 up next. Silver just shit the sheets and dropped to $29.71 and Gold is holding it's perpetual trading range dipping back into it's net -0-  $1635.00 range. Go PM's!

Mon, 05/07/2012 - 10:30 | 2403264 edstar
edstar's picture

should be some pent up demand but gold in INR is only 5% off its all time high.

Mon, 05/07/2012 - 10:34 | 2403271 youngman
youngman's picture

They also have a lower price which should mean more buying...even though its hard to watch the price of gold go down in these amazing political and fiscal the long term you will be glad you had it when you did...

Todays news about the elections is for me just another 1-2 trillion printed in the EU....more paper floating around..paper less is better

Mon, 05/07/2012 - 10:38 | 2403279 orangegeek
orangegeek's picture

Elliott Wave count on spot gold still shows longer term bearish.

Mon, 05/07/2012 - 10:45 | 2403292 Dr. Engali
Dr. Engali's picture

Please are you seriously trying to make a longer term wave call on a daily chart? Go back to chart school noob.

Mon, 05/07/2012 - 10:52 | 2403312 Zero Debt
Zero Debt's picture

Robert Prechter’s prediction for a massive decline in gold prices comes true

Gold prices fall 90% in one day

Reuters - April 1, 2013

Robert Prechter predicted in 2001, 2003, 2006, 2009, 2011, and most recently in January this year that gold could drop 50 percent from its peak value because of deflation and over-ownership. During that 12 year period, gold prices soared from $265 per ounce to a peak of $5,428 yesterday.

Prechter claimed that his long string of gold price forecasting failures was finally broken today when gold prices fell 90% from $5,428 to $542.80 when the Federal Reserve issued the New American Dollar and accepted previously issued US dollar currency at a ratio of ten to one.

Starting today, for each $1000 of old US currency turned in, a new $100 will be provided and all dollar accounts will reduced by 90%. Holders of old US currency have until April 15 this year to turn in all old currency, after which it will not be redeemable.

Asked if a revaluation of the dollar met his definition of deflation, Prechter stated, “Absolutely. When the price of anything declines 90% in one day, that is a severe deflation.”

Prechter is known for forecasting a big bull market in stocks in 1982 and for getting out before the 1987 stock market crash, and for not making any correct forecasts since then.

Mon, 05/07/2012 - 11:00 | 2403342 GMadScientist
GMadScientist's picture

Onion-class satire. Love it!

Mon, 05/07/2012 - 15:29 | 2404401 NotApplicable
NotApplicable's picture

I almost quit reading before I hit the punch-line.

Mon, 05/07/2012 - 11:10 | 2403382 Dr. Engali
Dr. Engali's picture

+ 1 Bravo

Mon, 05/07/2012 - 11:29 | 2403480 Clint Liquor
Clint Liquor's picture

Well done, Zero Debt!

This is of course, the real future you describe in your satire. The new US Dollar will be backed by Gold. Although your 90% is short about 500% you are spot on.

Mon, 05/07/2012 - 12:02 | 2403599 funthea
funthea's picture

If a new currency is introduced at 10% denomination of the former currency, yet while still representing 100% of the value, and all commodities now priced in this new currency drop by 90%, then the change is net zero. The commodities did not lose value, they simply were valued in a new currency. The only way to accurately view a 90% drop in price, is if you are still using the old currency; not a new one. The only deflation that took place was the deflation of the numbers printed on the bills.

Mon, 05/07/2012 - 15:30 | 2404406 NotApplicable
NotApplicable's picture

That's the joke!

Mon, 05/07/2012 - 10:45 | 2403280 Bansters-in-my-...
Bansters-in-my- feces's picture

You don't suggest the gold market is manipulated do you?

Fuck you little weasel timmy and your ESF.

Oh ya,you too benny.

Mon, 05/07/2012 - 10:40 | 2403287 tekhneek
tekhneek's picture

Looks like it's time to buy silver.

Mon, 05/07/2012 - 11:11 | 2403391 fuu
fuu's picture

On the cheap too.

Mon, 05/07/2012 - 11:28 | 2403471 EL INDIO
EL INDIO's picture

Amazingly cheap but still risky.

I think PMs will keep drifting lower until Benny starts real QE.

A prudent accumulation is probably a good thing at these levels though.

Mon, 05/07/2012 - 14:47 | 2404273 Likstane
Likstane's picture

risky?   WTF?  Are you going swimming with it?

Mon, 05/07/2012 - 10:41 | 2403290 midgetrannyporn
midgetrannyporn's picture

India should tell Clinton to pound sand.

Mon, 05/07/2012 - 11:01 | 2403346 GMadScientist
GMadScientist's picture

You're gonna wanna be more specific about which Clinton and exactly where you'd like the sand pounded.


Mon, 05/07/2012 - 10:45 | 2403298 JustObserving
JustObserving's picture

The question is why is not China buying more than India?  China has 2 or 3 times the wealth of India and gold is equally prized there.

When China starts buying more, we will see some price action.  Meanwhile, the Fed is winning in suppressing gold.


Mon, 05/07/2012 - 10:52 | 2403316 Zero Debt
Zero Debt's picture

Own more than thou showest

Mon, 05/07/2012 - 11:00 | 2403348 prole
prole's picture

I'm reading that chart to show China buying more gold than India for 2011.

IMHO the Chinese buy in bar coin and bullion form, while the Indians preefer the heavy jewelry which is really bullion form.

I am also reading that chart to show that US has a similar or equal PER CAPITA gold buying as India and China, which I find a little hard to believe, considering everybody with a rupee to dump in India holds gold, Chinese are supposed to be big gold investors, and most American Sheople don't invest in gold at all or so I thought. Confusing

Mon, 05/07/2012 - 11:32 | 2403490 Clint Liquor
Clint Liquor's picture

Also, China is the largest producer of Gold in the World and none of it leaves the country.

Mon, 05/07/2012 - 10:47 | 2403300 EL INDIO
EL INDIO's picture

Isn’t that tax just 0.3 % ?

The 4% import duty tax is the relevant one and it has not been removed, hast it?

So this may have little or no effect on the Indian Gold import. Besides the rupee Gold price is soaring because of the currency weakness, which is probably an even more important reason for the slum in Indian gold consumption: Demand destruction.

Mon, 05/07/2012 - 11:01 | 2403354 Bastiat009
Bastiat009's picture

Funny how the news is horrible bearish for the euro and yet ...

Gold, same thing .. just the other way around.

Mon, 05/07/2012 - 11:16 | 2403423 Clint Liquor
Clint Liquor's picture


John Butler lays out the future for Gold in link below. If you don't know where Gold is headed you better watch this:

Mon, 05/07/2012 - 17:01 | 2404721 Oldrepublic
Oldrepublic's picture

John Butler had an hour interview regarding Gold and his recent book



Mon, 05/07/2012 - 11:47 | 2403537 Venerability
Venerability's picture

Yahoo Finance Boards abruptly closed to human beings this morning - which essentially means closed to ME!

Silly, childish, ridiculous behavior - the exemplar of Arendt's "banality of Evil."

You CANNOT write headlines in advance and then expect reality to catch up to your headlines!

Does everyone finally now see that the main problem is not Events, but rather how those Events are presented in the financial media?

The wrong people are in charge of the financial media in both the UK and the US. They are skewing Sentiment in one great big computer game that has harmed the whole world.

The old Pravda was better, not worse. And generally, Xinhua is much better today.

Meanwhile, I have actually found exactly where the breach and insertion of a serious virus into the Seeking Alpha-Yahoo Finance link occurred last month. But I don't know how to fix it.

As for Yahoo Finance per se: You would think that the NewsCorp scandals in the UK would have persuaded NewsCorp- controlled entities in the US to start behaving themselves - especially in terms of Yahoo Finance.

But No, more and more Baby Games for the sake of Baby Games.

They're not gonna get away with it much longer. But they have to keep trying.

Mon, 05/07/2012 - 11:52 | 2403551 Zero Govt
Zero Govt's picture

it's like a tax on marriage in india

...politicians will tax anything, even trace elements like CO2 (nothing's too miniscule)

Mon, 05/07/2012 - 11:53 | 2403558 Venerability
Venerability's picture

And once more, those who are good with posting video need to get that Charlie Munger video insulting most of the planet out into the world as quickly as possible.

Explain who Munger is and how he epitomizes both the quintessential Ugly American and the Dollah! Dollah! Dollah! Empire mindset which has harmed America and most Americans even more than it has harmed the rest of the world.

Munger should be burned in effigy around the globe.

And his comments prove once and for all that real Progressives - along with real Conservatives - now need to embrace Gold avidly.

Mon, 05/07/2012 - 12:10 | 2403627 Sandoz
Sandoz's picture

This is essentially the exact same article posted nearly a month ago.

Still waiting to see that surge in "pent up demand." 


Mon, 05/07/2012 - 12:11 | 2403638 onebir
onebir's picture

Beat me to it. ;-)

Mon, 05/07/2012 - 15:15 | 2404359 Balmyone
Balmyone's picture

So what's the best place to buy gold and silver bullion.

Looks like this Merit company is going all out on ZH.

Mon, 05/07/2012 - 17:09 | 2404742 Oldrepublic
Oldrepublic's picture

This a good site:

Do NOT follow this link or you will be banned from the site!