Gold imports jump over two-fold to $13.35 billion in April-July
New Delhi: India’s gold imports more than doubled to $13.35 billion during the April-July period of the current fiscal, according to the data of the commerce ministry.
Gold imports, which has bearing on the country’s current account deficit (CAD), stood at $4.97 billion in April-July 2016-17.
In July this year, imports of the precious metal rose to $2.10 billion from $1.07 billion in the same month of the previous year.
Surge in gold imports in July contributed to the widening of trade deficit to $11.44 billion as against $7.76 billion in July 2016.
The rise in imports assumes significance as India is recording surge in the inbound shipments of the precious metal from South Korea, with which India has implemented a free trade agreement since 2010.
Officials have stated that the government is contemplating steps to check the surge in imports from that country.
Gold imports from South Korea has jumped to $338.6 million during 1 July – 3 August this year. The import in 2016-17 stood at $470.46 million.
Under the free trade pact between India and South Korea, basic customs duty on gold was eliminated.
Further, the 12.5% countervailing duty on gold imports has been subsumed in the Goods and Services Tax (GST). Accordingly, imports now attract only 3% integrated GST.
Under the FTA with South Korea, the government has recently notified rules for investigation of safeguard duties.
Countries impose this duty to discourage imports of a product. India is the world’s second biggest gold consumer after China.
The imports mainly take care of demand by the jewellery industry. At present, gold import attracts 10% duty.
The gems and jewellery industry along with the commerce ministry have time and again urged the finance ministry to consider a cut in the import duty.