Gold imports in 2013-14 to be less than 845 tonnes: FM

Gold imports in the current fiscal will be contained below last year's level of 845 tonnes, Finance Minister P Chidambaram said today.

"We have taken some strong measures on gold imports...We hope to contain gold imports at a level well below last year's total imports of 845 tonnes and save a considerable amount of foreign exchange, which will have a positive impact on CAD," he told reporters here.

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While gold imports in April and May were as high as 141 tonnes and 162 tonnes, respectively, they came down to 31 tonnes in June. For the first 25 days of July, the imports stood at 45 tonnes.

"The June-July imports of gold are less than last year's June and July. Overall, we hope to save a considerable amount of foreign exchange in respect of gold imports," Chidambaram said.

To curb demand, the government increased the import duty on gold thrice in a year and recently raised it to 8 per cent from 6 per cent. The RBI too has imposed restrictions on banks on importing gold.

India is the largest importer of gold, which is mainly utilised to meet demand of the jewellery industry.

High imports strain the current account deficit (CAD), which hit a record 4.8 per cent of GDP in 2012-13. CAD is the excess of total imports of goods, services and transfers over exports.

"...We estimate the (foreign) inflows will be well above USD 80 billion and that will be sufficient to finance comfortably the CAD, which will be contained at a level below last year's level," Chidambaram said.