Gold imports up 35.5% to Rs 80,000 cr during April-June quarter; trade deficit rises marginally to $45.96 bn

New Delhi: The country’s gold imports, which have a bearing on the current account deficit (CAD), increased by 35.5 percent to $11.45 billion (about Rs 80,000 crore) during April-June quarter of the current fiscal, according to commerce ministry data.

Imports of the yellow metal stood at $8.45 billion (about Rs 59,000 crore) in the same period of 2018-19. CAD, which is the difference between the inflow and outflow of foreign exchange, increased to $57.2 billion or 2.1 percent of GDP in 2018-19 as against 1.8 percent in the previous year. It stood at $48.7 billion in 2017-18.

Increase in gold imports pushed the country’s trade deficit marginally to $45.96 billion during the April-June quarter of 2019-20 as against $44.94 billion in the same quarter previous fiscal.

Since January this year, gold imports have recorded double-digit growth, except in February when it dipped by about 11 percent.

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.

To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on gold to 12.5 percent from 10 percent in this year’s Budget.

According to industry experts, due to high duty, businessmen of the sector could shift their manufacturing bases to the neighbouring countries.

The Gems and Jewellery Export Promotion Council (GJEPC) had expressed disappointment over the hike in import duty.

Gems and jewellery exports declined 5.32 percent to $30.96 billion in 2018-19. The country’s gold imports dipped about 3 percent in value terms to $32.8 billion during 2018-19.