The country’s gold imports more than doubled to USD 11.25 billion during the first quarter of this fiscal, driven by seasonal and festival demand. Gold imports stood at USD 4.90 billion in April-June 2016-17, according to the data of the commerce ministry. Increase in the imports influences India’s current account deficit (CAD). In June this year, the imports of the precious metal had risen to USD 2.45 billion from USD 1.20 billion in the same month the previous year. Surge in gold imports in June contributed to the widening of trade deficit to USD 12.96 billion as against USD 8.11 in June 2016.
Silver imports in June, however, dipped by 28.6 per cent to USD 178 million. India is the world’s second biggest gold consumer after China. The imports mainly take care of demand by the jewellery industry. At present, gold import attracts 10 per cent duty. The gems and jewellery industry along with the commerce ministry have time and again urged the finance ministry to consider a cut in the import duty. During April to December period of last fiscal ended March 31, the current account deficit halved to 0.7 per cent, from 1.4 per cent a year ago. The surge in gold imports in June is on account of low base effect.