New Delhi, September 14:

The lure of gold has made Indian imports rise phenomenally by a huge 61.2 per cent during the first half of 2005, states a new global report. “The striking feature of the first half of 2005 was the phenomenal rise in both gross and net imports by India, with the latter pushing towards the 500-tonne mark against 306 tonnes during the same period in 2004,” London-based precious metals consultancy GFMS Ltd said in its report released today.

The GFMS Gold Survey 2005- Update 1 estimates that all categories of offtake in India achieved record highs, with jewellery fabrication rising by nearly 50 per cent year-on-year. “However, both coin minting and bar hoarding rose by over 60 per cent,” the report stresses. Explaining one of the reasons for the phenomenal rise in Indian gold consumption, GFMS CEO Paul Walker said, “There is no disputing the fact that the adjustment of price expectations, both amongst the end consumer and through the value chain, has supported higher demand.”

In early 2004, there was a substantial rise in prices, which was followed by a dip towards the yearend and yet another rise, which is expected to continue. But the fact that the price in the first half of 2005 was notably lower than the average price in the last quarter of 2004 appears to have encouraged offtake, he felt.

“One of the key drivers of gold jewellery demand in the first half of 2005 was the success of the World Gold Council initiative to promote the auspicious day of Akshay Tritya (which fell on May 11) as a day to purchase new gold,” Walker said. Although behind the Indian subcontinent, the Middle East achieved the second highest growth rate of jewellery demand during the January-June, benefiting from stronger GDP growth, a record increase in oil prices and currency strength, with the latter offsetting some of the increase in the dollar gold price. In particular, Turkey set another record for the first half of the year with jewellery offtake registering a 16 per cent year-on-year gain.