Royal Mint Plans to Resume Gold Coin Production in India
By Prasanth Aby Thomas | February 18, 2013 9:30 PM EST
The UK's Royal Mint plans to restart making gold coins in India in a bid to cash in on the lucrative yellow-metal market in the subcontinent, according to a report by the Financial Times.
The government- held company, which is UK's oldest manufacturer, revealed that it will begin producing its sovereign commemorative coins in India for the first time since 1918.
Royal Mint's coins will be manufactured in the subcontinent under license by gold producer and trader MMTC-PAMP, which is a joint venture between a public sector firm MMTC and the Swiss manufacturer PAMP. The firm expects to make about $125mn (£80mn, €93mn) a year by 2016 from the venture.
According to the Indian business daily the Economic Times, the coins will bear the made-in-India mark and will reach consumers across the nation through bullion traders.
The decision from one of Britain's widely known brands come as Prime Minister David Cameron starts his three- day tour to the subcontinent with a number of business delegates with the aim of improving trade ties.
"It is great to see gold sovereign coins being introduced back into India for the first time in almost 100 years," Cameron said in a statement.
The company hopes that its products will be able to attract Indian consumers and become popular in the country's extravagant marriage ceremonies and festivals, where the yellow metal often makes an ideal gift.
India is the biggest consumer of gold. The country's obsession with the yellow metal is often a matter of close scrutiny, as even minor variation in consumer patters can have implications on global gold prices. According to the World Gold Council, global gold sales fell for the first time in three years in 2012, as Indian demand weakened.
But its demand rebounded towards the year end due to increased purchases during festival season, which includes the popular Diwali celebrations.
India's interest in Gold has even prompted the country's government to hike import duties by two percent and consider further similar measures.
Royal Mint's move to enter India comes after several British firms found it difficult to enter India's heavily competitive market, said the Financial Times, citing an unpublished report from TLG, a British consultancy.
The study notes that among the top 20 most respected companies in the country, the only British firm is telecom giant Vodafone, which stands 19th in the list. Other business majors such as the financial firms Baclays, HSBC and oil company BP did not make it to the list.
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