The rise in physical savings is reflected in higher gold imports as the lure of higher returns from yellow Metal rises. Adding fuel to the fire is the opportunity to conceal Black Money by BUYING Physical Gold is hurting the Indian Economy. Indian Gold Metal Imports rose significantly to US$56bn in FY12 vs US$4bn in FY01. The following Chart Shows the Last 12 Years Gold imports of India which consumes almost 27% of World’s Gold Produce.
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India’s current account crisis weakens Rupee
India’s high import demand for petroleum (which is nearly price inelastic) and gold (driven by a shortage of investible asset classes in a high inflation environment) are primarily responsible for India’s burgeoning import bill. In fact, adjusting for India’s imports of Petroleum products and Gold would turn India’s current account deficit (CAD) into a hefty current account surplus.
Things Look Gloomy for FY 2013 – Despite a large merchandise import bill,
RBI Must Investigate the Surge in Exports – Possible Black Money Laundering
Kotak Securities known for investigative research on Indian Companies and Economy pin-pointing the wrong doings ir-respective of his stature – Prime Minister or RBI or Mukesh Ambani is commendable, in out opinion.
Kotak Analysts are unable to tally the data of Exports and the sudden surge ahead of the Government signing treaties with various nations to prevent Black Money and Laundering. Here are some of the obvious questions which RBI as banking Regulator must investigate and explain.
Engineering goods exports accounted for 55% of incremental
Read moreRBI Must Investigate the Surge in Exports – Possible Black Money Laundering
Top 10 Foreign Exchange Remittances to India
A reader wanted to know the Top 10 Foreign Exchange Remitters to India. According to Data compiled by our analyst, the Middle-Eastern economies together account for 48% of total remittance flows into India. Here is the complete list of Foreign Exchange Remittances in USD Bn by NRIs to India.
- UAE – $14 Bn [Chances are high that Indian Politicians and Other Businessmen Havala Racket is very strong from UAE]
- USA – $12 Bn
- Saudi Arabia – $5Bn
- United Kingdom – $4.5 Bn
- Canada – $3.8 Bn
Decade of Gold for Indians – Investment Rises
India’s traditional love for Gold is well known. Over the last five years the relationship has become even more intense despite the sharp rise in Gold prices. Over the last three years, average annual investment in Gold has been of the order of US$20 bn…higher than that in ULIPs and substantially higher than that in equity linked mutual funds.
Demand is price elastic over the short term. A sharp increase in Gold prices has
India Trade deficit remains in double digits
In June, India’s trade deficit eased a tad to USD 10.5 bn from USD 11.3 bn in May 2010, although higher than the average of ~USD 9 bn over the past 12 months. Thus, Q1FY11 trade deficit has reached ~USD 32 bn, highest on record, excepting the quarter ending September 2008, when it was at ~USD 43 bn on the back of exceptionally high oil prices. Relatively slower growth in exports compared to imports (particularly oil imports) in the first three months of the current fiscal led to widening of the trade deficit. Sharp