Shares of jewelers climbed in India after the government withdrew an order that brought the industry under anti money-laundering legislation, a move that comes just as gold buying improves before the Hindu festival of Diwali, the peak season for demand.

Jewelers were included in the Prevention of Money-Laundering Act in August, increasing compliance requirements. Buyers have been shying away from making purchases as they had to provide their income tax identity for transactions above 50,000 rupees ($766), hindering high-value deals.

Titan Co. advanced as much as 5.7 percent to 630.40 rupees in Mumbai, the biggest jump since Aug. 4, while Tribhovandas Bhimji Zaveri Ltd. was up 8.1 percent and Gitanjali Gems Ltd. added 6.9 percent.

While rescinding the earlier ruling, the government said a separate notice would be issued after consideration of points raised through discussions with stakeholders. India also slashed tax rates on 27 items, and extended the period for small businesses to file returns, in a bid to reverse the blow to growth stemming from a chaotic roll out of the nationwide sales tax.

The laundering curbs, as well as the new sales and goods tax and rising prices, were dulling expectations for jewelry demand during the peak buying period before Diwali, the festival of lights, that falls on Oct. 19 this year.

But, with the scrapping of the compliance rules, sales may now pick up, providing relief to jewelers, according to Nitin Khandelwal, chairman of the All India Gems & Jewellery Trade Federation. “We will see the mid-sized, high-value purchases coming in now and sales will be better-than-expected during Diwali and the wedding season after that.”

Source:
courtesy of BLOOMBERG

by Swansy Afonso

If you have any stories or news that you would like to share with the global online community, please feel free to share it with us by contacting us directly at [email protected]