Bloomberg News has a story about T.S. Kalyanaraman, who shook up the gold jewelry business in India by putting pricetags on his products and teaching his customers how to test gold themselves.
Now he’s worth a billion (dollars not rupees) and is the first person in his state of Kerala to own a private jet.
India is the biggest market for gold. Brides are weighed down with gold jewelry, and it is considered auspicious to buy gold on religious holidays (often then presented to a temple).
“We don’t find it tough to sell gold; people love to buy jewelry,” Kalyanaraman said. “The only way to make your wife, sister or lover happy is to give them something that they love.”
In a separate Bloomberg story
, the government of India is raising the import duty on gold by 50% to help cover its current account deficit. The government feels it can manage this because the demand, and consequently the price, for gold has been rising, through good times and bad.
India, the world’s largest bullion buyer, increased taxes on gold imports to reduce a record current-account deficit and moderate demand for the precious metal that’s rallied for 12 straight years.
The duty on gold and platinum imports was raised to 6 percent immediately from 4 percent, Economic Affairs Secretary Arvind Mayaram told reporters in New Delhi yesterday. The tariff will be reviewed if imports moderate, he said. Gold climbed after the announcement.
Increased taxes may reduce gold demand in Asia’s third- largest economy after prices jumped 7.1 percent in 2012 as investors and central banks boost purchases. About 80 percent of India’s current-account deficit, the broadest measure of trade, tracking goods, services and investment income, is due to gold imports, according to the Reserve Bank of India.