Commerce Ministry reveals that gold imports dropped by 5 percent from April to January
There is a decline in the gold imports by the India government, a decline of 5 percent nearly amounting to USD 26.93 billion has been noticed from April 2018 to January 2019. Decline in the gold imports will help to keep the current account deficit.
From 2017 to 2018 the total import of gold was at USD 28.23 billion, information according to Commerce Ministry. Due to a decrease in the gold prices in the world market, could be the reason for the gold import decline in India, industry experts stated.
India is considered as one of the largest importers of gold in the world. The gold demand in India is mostly from the jewelry industries. Drop in jewelry and gem export was noticed which was down by 4 percent amounting to USD 32.9 billion from 10 months of the current fiscal year.
For almost 3 consecutive months, starting from October to December of 2018 significant growth was not recorded in India, while the gold imports were increased by 38.16 percent amounting to USD 2.31 billion in January 2019.
The difference between the inflow and outflow of foreign exchange, mostly known as the Current Account Deficit (CAD) of India was increased to 2.9 percent of the Gross Domestic Product (GDP) during the second quarter of the fiscal year, while difference was about 1.1 percent in its previous year due to large trade deficit.
There were several steps taken by the government to limit the gold import, limitation such as duty free gold imports from South Korea which was approved under the free trade agreement between India and Korea and the restriction of self-use condition mainly on Star Trading or Premier Trading House were allowed to import metals directly from bullion suppliers across the world
On the basis of volume, India’s gold imports were higher by around 22.43 percent to 955.16 tons during 2017-2018 while in 2016-2017 the volume was around 780.14 tones.
The domestic jewelry industries always seek to cut the import duty and also requests for relaxation norms so that they can increase the availability of gold in order to improve their Jewelry exports business. Import duty of 10 percent was imposed by the government on gold.