Sparkling demand in India for gold refiners: IFSCA
The authority is working with RBI on gold loans and leasing ecosystem, as financialization of gold is important; Gold is not circulated in economy, but stuck in cupboards
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Being a large buyer, there is a great opportunity to do the refining. India imports about 250 tons of ore for refining. I think, there is a case to look at whether refining can be commenced in the GIFT city as well. Enabling regulations are in place and if there are any further improvements required -- K Rajaraman, Chairperson, IFSCA
New Delhi: International Financial Services Centres Authority (IFSCA) Chairperson K Rajaraman on Thursday called for setting up of gold refining units in the country as India is a major buyer of the precious metal in the world. He said that there is a scope for moving up the value chain in the sector besides being a trading hub of gold. “Being a large buyer, there is a great opportunity to do the refining. India imports about 250 tones of ore for refining. I think, there is a case to look at whether refining can be commenced in the GIFT city as well. Enabling regulations are in place and if there are any further improvements required, we (can) look at that as well,” Rajaraman said. He added that some tweaks to tax policies or customs tariffs might be required to facilitate that and “we shall definitely look at it. So there is a case for refining in GIFT city,” he added.
Rajaraman was speaking at a gold conference, organised by IIM Ahmedabad- IGPC (India Gold Policy Centre) here. The IFSCA was established on April 27, 2020 under the International Financial Services Centres Authority Act, 2019. It is headquartered at GIFT City, Gandhinagar in Gujarat. The IFSCA is a unified authority for the development and regulation of financial products, financial services, and financial institutions in the International Financial Services Centre (IFSC) in India. At present, the GIFT IFSC is the maiden international financial services centre in India. India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonne of gold annually.
Rajaraman said that the authority is also working with the RBI on the gold metal loans and the leasing ecosystem. He also pitched for developing an index of financialisation of gold as it is an important commodity like land. “...It (gold) is stuck in the cupboards of ordinary citizens...800 tonne stuck in RBI vaults...It is not circulated in the economy. How to effectively use it for the benefit of the economy? Are there any risks emanating from such huge reserves accumulating without being financialised? These are some questions which we need to answer,” he said adding circulation of this gold in the economy would help in adding value and creating jobs.
