Gold mining firms has been the biggest beneficiaries of the policy reforms. The gold production has jumped from the 2 tonnes / year when the policy reforms started to about 80 tonnes / year in the last financial. This has resulted in direct import savings of about $5 billion. Due to the import, tax savings the domestic gold production has become cheaper. Unfortunately the government, instead of passing the benefit to the consumer, imposed a 12% GST on domestic jewellery sales. This has caused the exchequer to get several hundreds of crores of additional revenues.
At the projected growth rate, India’s gold production will pass China in next 5 years. The boost in gold mining has enticed large gold refineries from middle east to install capacities in India. The jewellery manufacturers of Surat have reported and uptick in their export earnings on the back of lower GST rates for gold meant for export oriented industries. It is projected that with increasing gold production at least ten new gold refineries would be needed. The largest of these gold refineries – “The Reliable Gold Refinery” recently established in Jamnagar is now responsible for about half of all gold concentrate processing of the country. Their expansion plans and technology upgrades have now enabled them to import gold concentrates from Tanzania and Ethiopia that were previously being refined in China. They have also started importing d’Ore bars from as far as Peru and Chile. The large volumes, enhanced capacity and large domestic market compensates for the longer transport distance. Their South American representative commented that “…due to our lower operating costs in India we are able to offer better deals to small miners and cooperatives in Peru, Nicaragua and Guyana, thus establishing ourselves as the preferred choice for these small operators…”
The immense goodwill thus generated has increased India’s stature in the diplomatic circles. The deepening economic ties with these smaller South American countries has encouraged them to support recent Indian proposal in the United Nations declaring “Hafiz Saeed” as a global terrorist and putting a ban on the “Lashkar”. This is being touted as a major diplomatic victory for India.
DISCLAIMER: This is a work of fiction. Names, characters, businesses, places, events and incidents are either the products of the author’s imagination or used in a fictitious manner. Any resemblance to actual persons, living or dead, or businesses, or actual events is purely coincidental.