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MUMBAI, May 7 (Reuters) - Gold imports by India, the world's biggest buyer of bullion, could rise on pent-up demand from jewellers after the federal government decided to scrap an excise duty on jewellery it imposed in March, the head of a trade body said on Monday.
Jewellers in India, which imported more than 950 tonnes last year -- a new record -- went on strike to protest against the duty and ended their action only after government reassurances that it would consider scrapping the tax.
A Reuters poll in March had estimated gold imports to fall to 655 tonnes in 2012, but with the removal of the duty, imports could be above this level and help branded jewellers such as help Titan Industries and Rajesh Exports.
"People (gold traders) who were on the sidelines will come back to the market... jewellery demand will improve in the coming weeks," Prithviraj Kothari, president of the Bombay Bullion Association, told Reuters by telephone.
"It's a good move by the government... Since March 16 till today there was no business for the whole value chain."
The duty rollback is the latest policy flip-flop by a government that has struggled to liberalise the economy enough to deal with slowing growth and ebbing investor confidence. Conflicting government views on cotton and sugar exports have dented the country's reputation of being a dependable supplier.
The federal government will withdraw the excise duty on all jewellery effective March 17 -- the date it was introduced -- Finance Minister Pranab Mukherjee told parliament.
The government has not rolled back its doubling of the import duty on gold to 4 percent of value.
Gold prices, that gained more than 39 percent since 2011, were at 28,988 rupees per 10 grams on Monday, down 0.67 percent. (Reporting by Siddesh Mayenkar; editing by Krittivas Mukherjee)