Gold supply restrictions adds to woes of jewellers

In the quarter ending September 2013, the Indian gem and jewellery industry has been grappling with worries over gold supplies. Most of the companies are left with stocks that would last only until the year end, reports say. The strain follows the Reserve Bank of India efforts to control gold imports, and its resultant ruling of 80/20, in which 20 percent of the gold imported has to be used for export purposes. Jewellers sometimes could find it tough to balance the international demand with domestic.

Most jewelers in India are dependent upon gold imports to supply in the domestic and international markets, and the supply downslide is causing much trouble, reports say. Also, as jewelers are also required to pay upfront for gold supplies, debts are increasing. The liquidity crunch is further weighing down on jeweler sentiments, reports add.