The (Indian) Elephant in the room

March import figures just released show an 88% increase in gold imports into India over February and the highest in 10 months.  This is despite premiums of nearly 15% over the already stifling 10% import duty and the 80/20 import/export limitations rule, and before the election results were known.  Many are now waiting in anticipation of newly elected Modi’s first budget in July.  

Whilst he may not simply remove the duties and import/export limitations altogether, India is already seeing increased exports and a rising rupee which begins to remove the very reason for the restrictions (gold was killing their current account deficit) and coincides with being just before the traditionally high demand wedding season.  In a world already consuming more physical gold than that being produced, unleashing the India elephant back into the market will be a very very interesting dynamic.