The country's gold imports during 2019 plunged 12 percent from a year ago to the lowest level in three years as retail buying faltered in the second half after local prices rallied to a record high.
Gold imports in December down 18% at 60 tonnes, 2019 imports down 12% at 831 tonne YoY: Reuters pic.twitter.com/iD57N1eWEe
— CNBC-TV18 (@CNBCTV18Live) January 3, 2020
In August last year, the domestic spot gold prices surged to a life-time high of Rs 40,220 per 10 grams due to worries over a possible global recession and uncertainty over the US-China trade talks.
Since then, the gold prices did not decline much and continued to hover around Rs 39,000 per 10 grams in the rest of the year.
Lower buying by the world’s second-biggest consumer of the precious metal could weigh on global prices that jumped 18 percent in 2019, but help New Delhi bring down the trade deficit and support the rupee, reported Reuters.
India imported 831 tonnes of gold in 2019, down from 944 tonnes a year ago, the source said, who is not authorised to speak to the media. In value terms, 2019 imports fell nearly 2 percent to $31.22 billion, reported Reuters quoting a government source on Friday.
The decline in gold imports has helped in narrowing the country's trade deficit to $106.84 billion during the eight-month period under review as against $133.74 billion in the year-ago months, reported PTI.
Gold imports had been recording a negative growth since July this year. However, it grew about 5 percent to $1.84 billion in October and 6.6 percent to $2.94 billion in November.
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 tonne of gold annually.
To mitigate the negative impact of gold imports on trade deficit and current account deficit (CAD), the government increased the import duty on the metal to 12.5 percent from 10 percent in this year's Budget.
Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to this high duty.
The Gems and Jewellery Export Promotion Council (GJEPC) has asked for a reduction in import duty to 4 percent.
Gems and jewellery exports declined about 1.5 percent to $20.5 billion in April-November this fiscal.
The country's gold imports dipped about 3 percent in value terms to $32.8 billion in 2018-19.
The CAD narrowed to 0.9 percent of the Gross Domestic Product (GDP) or $6.3 billion in July-September, 2019-20 from 2.9 percent or $19 billion in same period last year.
The contraction in the CAD was primarily on account of a lower trade deficit at $38.1 billion as compared with $50 billion a year ago, a Reserve Bank of India (RBI) data stated.
— With inputs from agencies
Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.
Updated Date: Jan 03, 2020 13:06:31 IST