Gold imports dip 14% to $28.2 bn during 2019-20; gems and jewellery exports decline 11% to $35.8 bn

New Delhi: Gold imports, which have a bearing on the country’s current account deficit (CAD), fell 14.23 percent to $28.2 billion during 2019-20, according to commerce ministry data.

Imports of the yellow metal stood at $32.91 billion in 2018-19.

The decline in gold imports has helped in narrowing the country’s trade deficit to $152.88 billion during the last fiscal, as against $184 billion a year ago.

Gold imports have been recording negative growth since December last year.

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

In volume terms, the country imports 800-900 tonnes of gold annually.

Click here to follow LIVE news and updates on stock markets

To mitigate the negative impact of gold imports on the trade deficit and CAD, the government increased the import duty on the metal to 12.5 percent from 10 percent.

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 percent.

Gems and jewellery exports declined 11 percent to $35.8 billion in 2019-20.

The country’s gold imports dipped by 3 percent in value terms to $32.8 billion in 2018-19.

The CAD, which is the difference between inflow and outflow of foreign exchange, narrowed to 0.9 percent of gross domestic product (GDP) or $6.3 billion in July-September 2019, from 2.9 percent of GDP or $19 billion in the corresponding period last year, according to the Reserve Bank’s data.