Gold imports fall by 32.7% to $19.74 bn in April-Jan 2016-17

The Dollar Business Bureau

India’s gold imports declined by around 32.7% to $19.74 billion during the ten-month period from April-January of the current fiscal, which is likely to keep a limit on the current account deficit (CAD). 

The overall imports of the yellow metal stood at $29.31 billion in the corresponding period of FY 2015-16.

According to experts, easing of prices of the precious metal in local as well as global markets could be the reason behind the decline in imports. 

Cash crunch in the country due to demonetisation, in November, also impacted the imports. 

Gold imports fell by around 30% to $2.04 billion in the month of January compared to $2.91 billion in the same month in 2016, as per the data by commerce ministry. 

The decline in imports helped in bringing down of the trade deficit to $86.38 billion in the period April-January compared to $107.74 billion in the same period a year ago. 

India is one of the largest importers of gold in the world, and these imports majorly meet the demand of the jewellery industry. 

For the entire financial year of 2015-16, CAD was $22.1 billion, or 1.1% of GDP (Gross Domestic Product), as against $26.8 billion, or 1.3%, in FY 2014-15. 

In terms of volume, India’s overall official gold imports fell to 60 tonnes in the period April-July of current fiscal, much less than 250 tonnes in the same period a year ago. The country imported 650 tonnes of the precious metal in FY 2015-16. 

The imports remained stagnant at about 100 tonnes in the month of November despite a decline in sales of jewellery due to the cash crunch.

As per experts, the demand of gold in rural areas was impacted due to note ban, limit on money withdrawal from banks and ATMs.