Updated from 1:48 p.m. ET with settlement prices
NEW YORK (TheStreet) -- India's national election thrusting the Bharatiya Janata Party into power of the government may spell an end to the nation's growing black market trade.
Some 50 tons of gold a quarter, or as much as 250 tons per year, have traded on India's black market since the country imposed heavy tariffs on the precious metal, the World Gold Council said in an interview, citing market sources.
India last month voted the BJP to control the lower house of parliament in a decision that could spell weakened tariffs on gold and shrink the precious metal's black market trade, which likely didn't exist before the regulations.
"It's certainly something that is shrouded in a lot of secrecy; however, market sources have indicated somewhere in the region of 50 tons per quarter, or something in the relm of 200 to 250 tons per annum," Will Rhind, managing director of investment at the World Gold Council, said.
Rhind said before the tariffs, "theoretically" a gold black market didn't exist because Indians traded the metal freely. The tariff's unintended consequence was to create a black market, Rhind said.
India's government votes in July on a new budget, in which the right-of-center BJP is likely to propose a change to the tariffs.
Gold prices on Tuesday were trading sideways as investors remained on the sidelines ahead of the European Central Bank's Thursday policy announcement, and Friday's monthly U.S. employment report.