Even as India is the second-largest consumer of gold, it imported only 50 kg of gold in April, compared to 110.18 tonnes in the same month a year ago.
One of the largest gold importers in the world — India — did not import nearly any gold in the month of April. India’s gold imports plunged 99.9 per cent on-year in April to their lowest in nearly three decades, Reuters reported citing a government source. Restriction on the movement of goods and the nationwide lockdown leading to the closure of jewellery shops are the main reasons behind the near-nil gold imports. Even as India is the second-largest consumer of gold, it imported only 50 kg of gold, compared to 110.18 tonnes a year ago.
The drop in imports can be gauged in value terms, where April imports dropped to $2.84 million from to $3.97 billion a year ago, the report added. To arrest the widespread of the coronavirus pandemic, the Indian government put a ban on international and domestic flights. This also made a remarkable effect on gold imports as the movement of gold is majorly done via air.
Even since January 2020, the gold demand in India was much lower than the normal level. Indian gold demand fell by an unprecedented 36 per cent to 101.9 tonnes in the Jan-Mar quarter due to high prices and pandemic lockdown. This is the lowest quarterly figure in over 11 years and significantly lower from 159 tonnes in the corresponding period last year, according to the World Gold Council. The jewellery demand was hit the hardest with demand plunging by 41 per cent and investment also falling by 17 per cent.
“We believe that Indian gold demand will continue to remain weak in the coming weeks or months as physical gold business continues to be hurt while certain Indian states still remain under lockdown due to rising cases of Covid-19. Additionally, weaker Rupee expectations could send the Rupee gold price even higher, which will continue to weigh on Indian gold demand even if the lockdown is lifted in mid-May,” Sriram Iyer, Senior Research Analyst, Reliance Securities, told Financial Express Online.