(Reuters) – Russian bank VTB said it had begun to export gold and silver bullions to India on Thursday to expand its business in the Asia-Pacific region.
Indian imports of gold are under heavy pressure after the government raised duties on the yellow metal earlier this year repeatedly to help reduce the present account deficit.
India has been the world’s biggest consumer of gold, but it is expected to be surpassed by China by the end of 2013, because of the import restrictions and the increased physical demand from China.
VTB said that the first deliveries were made in batches over the past few weeks, to New Delhi, Hyderabad, Jaipur and Agra. It was looking at entering other emerging precious metals markets in Asia. The bank intended to take advantage of the move in gold flows towards different Asian countries this year.
Gold price in the spot market lost about 25% of its value. The price drop worried investors in Western countries. The result was a sharp liquidation of speculative and exchange-traded funds. However, the price drop also prompted strong physical demand on the precious metal from India, China and elsewhere in Asia.