Gold imports increase 54% to $3.97 bn in April; trade deficit widens to five-month high amid concerns of CAD

New Delhi: Gold imports increased 54 percent to $3.97 billion in April, widening the country’s trade deficit and fuelling worries about the current account deficit (CAD).

Imports of the precious metal stood at $2.58 billion in April 2018, according to data from the commerce ministry.

Increase in gold imports pushed the country’s trade deficit to a five-month high of $15.33 billion in April.

The country’s CAD widened to 2.5 percent of Gross Domestic Product (GDP) in the third quarter of the last financial year from 2.1 percent a year ago, primarily on account of a higher trade deficit, though the foreign exchange reserves continued to soar.

The CAD is the difference between the outflow and inflow of foreign exchange.

After recording negative growth in imports in February, gold imports started registering double-digit growth.

In March, it grew 31 percent to $3.27 billion.

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.

The imports dipped about 3 percent in value terms to $32.8 billion during 2018-19.