Demand for gold in India has been slow to come back after falling sharply last year.

But, a revival back to 800-900 tonnes a year is in the cards for the country, said managing director at World Gold Council India.

Some blame the slump in the demand on the Indian government’s continuous push for more transparency. Yet, WGC’s Somasundaram PR is convinced the effects are only temporary.

“Government in India is not anti-gold. It has two overall objectives: One is to increase the tax base, and the second is to promote transparency in trade and commerce,” Somasundaram told Kitco News in a telephone interview.

The government has passed numerous new laws in the last couple of years that might have discouraged some consumers from purchasing gold, Somasundaram said.

In the short-term, WGC sees gold demand staying around 650 – 750 tonnes in 2017.

“The demand will come back, but it could take one or two years before it is back up to 800-900 tonnes a year,” he noted.

Consumer purchases of the yellow metal tumbled down 22% to 674 tonnes in 2016, down from 863 tonnes reported in 2015.

During that time in India, one major change included the demonetization of all 500 and 1,000 rupee bank notes. “This helped to bring out a lot of cash people held as part of unaccounted wealth, but created a lot of issues in the process,” he noted.

Earlier, the government also made it public knowledge that only 2% of Indians actually pay income taxes. To address this, India implemented a law, forcing anybody who buys anything for more than $3,000 to provide their tax number.

Read the rest of the story on Kitco.