Indian banks have temporarily halted the import of gold and silver, leaving tons of precious metals stuck at customs. The reason for this is the absence of a new government permit for the import of bullion. This is reported by Reuters, writes UNN.
Details
According to sources, more than 5 tons of gold and about 8 tons of silver are currently unable to clear customs. Banks have also suspended new orders from foreign suppliers.
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Every year, India's Directorate General of Foreign Trade issues a list of banks authorized to import precious metals. The previous permit was valid until March 31, but the new document has not yet been published.
Due to the uncertainty, banks are not risking processing new deliveries.
There is no point in placing new orders when previous batches cannot be processed
Possible consequences
India is the second largest consumer of gold in the world and the largest buyer of silver, so the halt in imports could lead to a shortage in the domestic market.
According to market participants, the country is already beginning to rely on sales from exchange-traded funds to compensate for the shortage of metals.
At the same time, import restrictions could temporarily reduce India's trade deficit and support the national currency, which has shown weak performance this year.
Experts also do not rule out that the delay in the permit is related to the increase in import costs for energy due to the war in the Middle East.
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