Factbox: Key facts about India’s gold industry

(BestGrowthStock) – India’s centuries-old gold industry is the world’s biggest market for the metal, with imports meeting almost all the country’s requirements for jewelry and investment.

While some aspects of the industry remain unchanged, some shifts in consumption patterns are striking.

Here are facts on the industry and changes taking place:

– India in 2009 faced its weakest year since gold trade was freed up in 1997. Record high prices and a failed monsoon cut imports by 33 percent from the previous year to 480 tonnes, against an annual range between 600 and 800 tonnes in the previous five years.

– Imports are high partly because of the large population of about 1.2 billion. Per capita gold consumption is only 0.7 grams, half that of the United States and one-third of the Middle East, according to World Gold Council (WGC) estimates.

– India’s gold market is estimated to have more than 300,000 jewellejewelersrs, mostly small, family-run businesses, a WGC study showed.

– Only 23 banks and some private and government trading agencies have licenses to import gold because of its implications for foreign exchange flows.

– India’s 2010/11 budget raised the import duty on gold and platinum to 300 rupees ($6.65) per 10 grams from 200 rupees earlier, with the duty on silver raised to 1,500 rupees per kg from 1,000 rupees earlier.

– Investment purchases of gold have been rising faster than jewelry purchases. WGC’s latest data shows the investment to jewelry ratio is approximately at 20:80.

– Gold in the form of exchange-traded funds is rising. Launched in 2007, the total collection among six fund houses is more than 10 tonnes.

– In urban areas, gold faces competition from diamonds as incomes have risen, but the higher purchasing power of the lower and middle income sections of the population has brought new customers into the market.

– Large corporate jewelljewelersers, such as Titan Industries (TITN.BO: ), Reliance Jewels, Rajesh Exports (REXP.BO: ) and the state-run MMTC Ltd (MMTC.BO: ) are targeting the retail market with plans to have hundreds of shops, hoping to rely on branding to push up sales.

– India’s imports of gold in the last six years in metric tonnes, as per World Gold Council data:

Gold imports

2009 480

2008 712.6

2007 769.2

2006 715.5

2005 721.6

2004 614.5

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(Compiled by Ruchira Singh; Editing by Clarence Fernandez)

Factbox: Key facts about India’s gold industry