Gold imports dip 9 per cent to $24.64 billion during April-January

By: |
Published: February 16, 2020 1:54:40 PM

The decline in gold imports has helped in narrowing the country's trade deficit to USD 133.27 billion during April-January period of the current fiscal as against USD 163.27 billion a year ago.

Gold imports, current account deficit, Reserve Bank data, GDP, trade deficitIndustry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to the high duty. (Reuters photo)

Gold imports, which have a bearing on the country’s current account deficit (CAD), fell about 9 per cent to USD 24.64 billion (about Rs 1.74 lakh crore) during April-January period of the current financial year, according to Commerce Ministry data. Imports of the yellow metal stood at USD 27 billion in the corresponding period of 2018-19.

The decline in gold imports has helped in narrowing the country’s trade deficit to USD 133.27 billion during April-January period of the current fiscal as against USD 163.27 billion a year ago. Gold imports have been recording a negative growth since July last year.

However, it recorded a positive growth in October and November last year, only to contract by about 4 per cent in December and 31.5 per cent in January this year. India is the largest importer of gold, which mainly caters to the demand of jewellery industry.

In volume terms, the country imports 800-900 tonnes of gold annually. To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on the metal to 12.5 per cent from 10 per cent. Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to the high duty.

Gems and jewellery exporters had asked for a reduction in import duty to 4 per cent. Gems and jewellery exports declined 1.45 per cent to USD 25.11 billion in April-January this fiscal. The country’s gold imports dipped about 3 per cent in value terms to USD 32.8 billion in 2018-19.

The CAD narrowed to 0.9 per cent of gross domestic product (GDP) or USD 6.3 billion in July-September 2019 from 2.9 per cent of GDP or USD 19 billion in the corresponding period last year, according to the Reserve Bank’s data.

Imports of rough diamonds contracted 15.54 per cent to about USD 11 billion during April-January 2019-20, according to the data of the Gem and Jewellery Export Promotion Council. However, import of gold bars grew 3.56 per cent to USD 6.6 billion during the period.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1China’s changing demand dynamics to put price pressure on shrimps: Icra
2Gold prices fall today as rupee rises against US dollar, sliver rates trade higher; check intraday level
3Gold eases as equities edge up, virus concerns cap losses