Bullion Market India

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  Bullion Market :: Hundia Vision

THundia is one of the businessmen who crafted success out of zero. Today, this man only talks in crores but the money has not changed him. He is still a simple and down to earth man and accessible to anybody from the trade. He doesn't have any family business background in bullion or he doesn't carry any fancy degrees in finance or business. But today he can be considered as the encyclopaedia of bullion business of India, which talks and walks also.

. President of the Bombay Bullion Association
. Has a vision to make India as a gold hub and fix its own prices
. Agressive, pro active, well connected


It is said that one cannot learn real life lessons in the four walls of classroom but one has to gain knowledge of them in the open world out there. Suresh Hundia, President of Bombay Bullion association is an ideal example of it. After completing his high school Hundia entered bullion business. He doesn't have any family business background in bullion or he doesn't carry any fancy degrees in finance or business. But today he can be considered as the encyclopaedia of bullion business of India, which talks and walks also. His knowledge about Indian bullion business is not theoretical, it is practical. Hundia leads apex bullion association of India-Bombay Bullion Association (BBA). He also runs his own bullion house Hundia Exports-started in 1993-it is a government approved exports house deals into gold and silver medallions and standard bars. It also deals into future markets at MCX (Multi Commodity Exchange) and NCDEX (National Commodity and Derivatives Exchange). Hundia Exports imports around 40-45% silver from the total annual silver imports into India.

India used to imports 600 to 800 tonnes of gold earlier, but in the last two years the imports has fell down, thanks to high gold rates. The import was 24% down in 2009 to 343 tonnes compared to 449 tonnes of 2008. However, Hundia doesn't think that the demand for gold was down. India's love for gold is so strong that they gave their gold ornaments and made new designs out of it-paid just jewellery making charges. "Hence, the demand was there but it was fulfilled through supply of scrap gold." He further mentions that the quantity of gold sold in India is dropped down, but in value terms, industry is doing very well.

The high gold rates pushed many gold jewellery retailers to enter imitation jewellery business. The colourful stone jewellery and one gram jewellery is in great demand now. Commenting on growth of imitation jewellery business and its popularity, Hundia informs that "Mumbai Zaveri Bazar didn't have any imitation jewellery shop four years back. But today it houses 49 shops. That's the speed, it is growing."

The gold jewellery is the traditional way of consumption in India from centuries. But now he wants that consumer should invest in paper gold. The gold Exchange Traded Funds did so well during recession across the world, but the Indian gold ETFs performance don't match to their super performance. He says that "Anyone will be surprised to know that only 1% people from the country of 100 crore invest in share market." Further providing reasons why India, the largest consumer of gold lags behind when it comes to paper gold. "Indian woman is so fond of gold that she doesn't want to lose it at any condition. The possession of gold jewellery makes her feel wealthy as well as gorgeous. They will sell out their jewellery only when they are left with no other options. So though India has gold treasure, it is in the private hands."

Hundia states that one need to change consumer's this attitude towards gold. The consumers should invest in gold. However, Indian government should cancel all the duties on gold. "Other than India one will find any other country which charges tax on gold investment. The taxes should be levied on those who sell gold like jewellers", says he.

Though India is the largest consumer of gold in the world, its role into bullion trading and fixing up gold prices is very minimal. India buys 30 to 35 % of gold from world annual production. According to Hundia, India doesn't have healthy atmosphere of bullion trading. "If here investor invests in gold, he has to pay taxes. That is not the case for other countries. We cannot export gold in the same size we imported. Every state has their own tax policy and the central government has different policy. There are so many restrictions and that's why we still depend on New York and London market for the prices."

He looks at the Reserve Bank of India's purchase of 200 tonnes of gold as a good move for investors as well as for the economy. He says, "This gold can be use as hedge against foreign exchange reserve which is $443million-mostly in US dollars. There is inverse relationship between gold rate and dollar rate. Hence, it would have been better if the RBI would have bought 200 tonnes of gold more."

Hundia joined the Bombay Bullion Association in 1998-key organisation for bullion business of India. He has been instrumental putting bullion trade in a proper order. At present, BBA has 448 members, out of which 200 members regularly do trading on the exchanges. Under Hundia's leadership, BBA stared future markets at MCX and NCDEX. The directors of BBA including Hundia are on the advisory panel of these exchanges. "The BBA has helped and given valuable inputs for forming of contracts and operational processes to these exchanges. Bullion contributes to approximately 90% of MCX total turnover daily basis. Today bullion turnover is about Rs.10, 000 crores per day on these exchanges. And BBA members are responsible for majority of the turnover on these exchanges", informs he.

Providing details on the future plans of BBA Hundia says, "We are planning to launch a Bullion Spot Exchange, hallmarking centre and bars or coins and lagdis of gold and silver soon. We are also going to open Bullion Museum and library and have plans of introducing computerised weight slip of Dharam Kanta."

Hundia is one of the businessmen who crafted success out of zero. Today, this marionly talk in crore but the money has not changed him. He is still a simple and down to earth man and accessible to anybody from the trade. Just like him, his ideas of pleasure are very simple. His idea of relaxation or refreshing break means a long walk on the Marine Drive. Moreover, if he manages to get more than a day time from his cut-to-cut schedule, he loves to drive Lonawala. This simple man doesn't want to spend any time on what will happen with bullion business after five or ten years, but he believes in today and wants to solve the issues concerned to the bullion industry. He is sure that "if we take care of today, the time will take care of our future automatically."