Gold imports dip 9% to USD 24.64 bn during Apr-Jan

Gold imports, which have a bearing on the country's current account deficit (CAD), fell about 9% 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% in December and 31.5% 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% from 10%.

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%.

Gems and jewellery exports declined 1.45% to USD 25.11 billion in April-January this fiscal.

The country's gold imports dipped about 3% in value terms to USD 32.8 billion in 2018-19.

The CAD narrowed to 0.9% of gross domestic product (GDP) or USD 6.3 billion in July-September 2019 from 2.9% 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% 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% to USD 6.6 billion during the period.