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India is likely to import between 3500 and 4000 tonnes of Silver Bullion in 2012 – compared to 4800 tonnes last year – says Sunil Kashyap, head of Asia at bullion bank Scotia Mocatta.
Kashyap expects this drop despite the fact that the duty on Silver Bullion imports was left unchanged at 5% in last month's Union Budget. Unlike duty on silver, the duty on imports of Gold Bullion was doubled last month from 2% to 4%, a move which Kashyap argued this week could see reduced demand to Buy Gold.
"Import taxes increase the cost of metal to the final consumer," he said, "and so the higher price may dampen demand for 2012."
Elsewhere in India, gold jewelers have ended their strike in protest at measures announced in the Budget, and are now turning their attention to this month's Akshaya Tritiya festival.
"All shops have reopened," said Prithviraj Kothari, president of the Bombay Bullion Association, earlier this week, adding that imports of Gold Bullion for April and May combined should total around 100 tonnes, a 30% drop from the same period last year.
Last year, India – which in addition to the duty hike recently tightened its rules on gold imports – imported an estimated 969 tonnes of gold, according to World Gold Council figures.
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