Imports of gold bars into India totaled 23.8 mt in February, down 61% on the previous month, to the lowest monthly inflow on record, Indian customs data showed Monday.
The Indian gold market, the world's largest after China, has struggled with high international prices as gold continues to outperform in 2016, up more than 17% since the start of the year to just over $1,250/oz Monday morning.
The discount paid for physical gold in India to the international price has extended to record levels in recent weeks, heard at $30-35/oz countrywide Monday, as local investors continue to be deterred by steep prices and as a national strike by the country's jewelers extends into its 11th day.
Indian jewelers called a nationwide strike March 3 in response to a 1% excise tax announced by the government in an attempt to curtail gold demand in a country almost entirely reliant on imports to meet its huge levels of consumption.
The 1% jewelry excise tax is in addition to a 10% import tax already levied by the government, introduced two years ago.
The jewelry industry is India's third largest employer outside of agriculture and textiles and a similar three-week strike in 2012 forced the previous government to reverse plans for a 1% tax on non-branded gold.
Gold represents about a quarter of India's current account deficit, with annual consumption of 900-1,000 mt met almost exclusively by imports.
Meanwhile, customs data showed imports of gold dore -- gold ore used in refining -- totaled 36.8 mt in February, fairly flat on the previous month.
Taxes levied on gold dore imports were lifted by 0.75% to 8.75% for those operating in a special economic zone in the north of the country in this year's budget.
For refiners outside the economic zone the duty was raised half a point to 9.5%.
The London Bullion Market Association Gold Price settled at $1,256.55/oz Monday morning, down $8.30/oz on Friday's close.
