India's gold imports more than doubled to USD 13.35 billion during the April-July period of the current fiscal, according to the data of the commerce ministry.
India’s gold imports more than doubled to USD 13.35 billion during the April-July period of the current fiscal, according to the data of the commerce ministry. Gold imports, which has bearing on the country’s current account deficit (CAD), stood at USD 4.97 billion in April-July 2016-17. In July this year, imports of the precious metal rose to USD 2.10 billion from USD 1.07 billion in the same month of the previous year. Surge in gold imports in July contributed to the widening of trade deficit to USD 11.44 billion as against USD 7.76 billion in July 2016.
The rise in imports assumes significance as India is recording surge in the inbound shipments of the precious metal from South Korea, with which India has implemented a free trade agreement since 2010. Officials have stated that the government is contemplating steps to check the surge in imports from that country. Gold imports from South Korea has jumped to USD 338.6 million during July 1-August 3 this year. The import in 2016-17 stood at 470.46 million. Under the free trade pact between India and South Korea, basic customs duty on gold was eliminated. Further, the 12.5 per cent countervailing duty on gold imports has been subsumed in the Goods and Services Tax (GST). Accordingly, imports now attract only 3 per cent integrated GST. Under the FTA with South Korea, the government has recently notified rules for investigation of safeguard duties. Countries impose this duty to discourage imports of a product. 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.