New Delhi: India's gold imports dipped about 5.5% in value terms to $29.5 billion in April-February 2018-19, which is expected to keep a lid on the current account deficit. Total gold imports in the corresponding period of 2017-18 stood at $31.2 billion, according to commerce ministry data. Softening gold prices in global markets seen as the reason for the contraction in imports.
After recording negative growth for three consecutive months—October, November and December 2018—gold imports grew 38.16% to $2.31 billion in January 2019. It again contracted by 10.8% to $2.58 billion in February.
India is one of the largest gold importers in the world, and the imports mainly take care of demand from the jewellery industry.
Gems and jewellery exports too dipped by 6.3% to $28.5 billion during the 11 months of the current fiscal.
India's current account deficit (CAD), or the difference between outflow and inflow of foreign exchange in the current account, widened to 2.9% of the GDP in the second quarter of the fiscal, against 1.1% in the year-ago period, mainly due to a large trade deficit.
In volume terms, the country's total gold imports increased by 22.43% to 955.16 tonnes in 2017-18. It stood at 780.14 tonnes in 2016-17.
The government has introduced several measures to restrict gold imports, including restricting duty-free gold imports from South Korea as allowed under the India-Korea free trade agreement and imposition of self-use condition on Premier Trading House/Star Trading House authorized to import the precious metal directly from overseas bullion suppliers.
It has also imposed 10% import duty on gold.
The domestic jewellery industry always demands a cut in the duty and relaxation of norms for increasing availability of gold to boost jewellery exports.