Pandemic fails to dent gold, silver demand in India

Question: It appears that the pandemic has not affected the demand for gold and silver in India. Is this trend likely to continue?

Answer: Gold and silver imports in 2021 have surpassed the pre-pandemic level. According to the data released by Ahmedabad Air Cargo Complex, 42.1 metric tonnes of gold was imported into Gujarat in 2021 as against 18.8 metric tonnes in 2020 and 41.79 metric tonnes in 2019. Showing an even more bullish trend, silver imports were 319.4 metric tonnes in 2021 which was 1.5 times the silver imported in 2019. The demand for Sovereign Gold Bonds and Gold Exchange Traded Funds has also been spectacular. The demand for jewellery has been robust during the wedding season. Imports of gold have increased in response to the reduction in customs duty for gold from 12.5 per cent to 7.5 per cent. Further, interest rates charged by banks have been reduced enabling people to take higher amount of loan. Gold is being recognised as a safe haven for investments. Investment in silver has gone up as better returns are anticipated. With higher demand for gold and silver, the employment potential in the gems and jewellery sector has improved significantly.

Question: Despite acute volatility in the movement of crypto currencies, many young persons, including my sons, are enthusiastic about trading in these currencies. Is there any point which I am missing out on?

Answer: A growing number of young investors are enthused to invest in crypto currencies based on the prospects of high returns. However, many young, tech savvy persons are attracted to blockchain technology. Blockchain is a secure, decentralized ledger of transactions across a network. Using this technology, participants can verify transactions without a third party intervention or without a central authority monitoring it. Blockchain technology can be used for many purposes including settling trades. Blockchain is known as a trustless network because the transacting parties do not need to trust each other. Instead it is technology which promises security, transparency and traceability. Blockchain helps to make business processes efficient and reduce costs. Many investors find crypto currencies hard to ignore because of the ease of investing and transacting.

Question: There are hardly any aero sport facilities in India. As a result many Indians have to go abroad in order to enjoy the facilities available there. Are any steps being taken to develop infrastructure in this regard?

Answer: An ecosystem for promoting air sports is proposed to be set up in India by 2030 which would make such sport safe, affordable, accessible and enjoyable. This is done in order to take advantage of the countrys large geographical expanse, diverse topography and good weather conditions. Fixed locations for air sports facilities are being set up in Himachal Pradesh, Sikkim, Maharashtra and Kerala. The air sports facilities proposed to be set up include those for aero modeling, amateur built and experimental aircraft, ballooning, gliding including paragliding, skydiving, micro lighting and para-motoring. To make air sports affordable for the common man, the GST Council will be approached by the Government to bring down the GST rate on air sports equipment to five per cent or less. India aims to attract aero sports enthusiasts from Europe and North America during the winter months when the climate in India is much milder. An Air Sports Federation of India is proposed to be established as the apex governing body. Competitions in air sports are proposed to be conducted in India as per guidelines of the Federation Aeronautique Internationale which is a Swiss based organisation.

H. P. Ranina is a practicing lawyer, specialising in tax and exchange management laws of India.