Gold imports shrink nearly 8% in 2015-16

The Dollar Business Bureau

India’s gold imports fell about 8% in the financial year 2015-16, thereby bringing down the country’s current account defect to a record low.

The imports of gold stood at $31.72 billion in 2015-16 as against $34.38 billion in 2014-15.

The imports of yellow-metal sank 80.48% to $972.96 million in March this year when compared to $4.98 billion last March. The lesser imports was largely due to the long strike undertaken by the jewellers. They were protesting against the union government’s proposed 1% excise duty on imports of non-silver jewellery.

Similarly the contracting gold prices in both international and national markets were also the paramount reason for its less imports. In March, gold was the single largest contributor to the country’s current account deficit.

A less import of the yellow-metal in March has also kept a check on the country’s current account deficits (CAD), which narrowed to $5.07 billion in March, its lowest in the last five years. The CAD was $11.39 billion in the year-ago period.

The country's CAD contracted to 1.3% of GDP during the third quarter of 2015-16 as compared to 1.5% during the corresponding period of 2014-15.

India’s trade, imports as well as exports, has been shrinking for almost 16 months, which has essentially been helping the country put a lid on its current account deficit.

India is currently the world’s largest importer of gold, and the present government has for long been reiterating the need to bring down the country’s dependency on the metal’s inbound shipments.

Last year, Prime Minister Narendra Modi had unveiled three gold-related schemes to extract tonnes of gold stored in domestic households and temples, with an aim to stimulate them in the market and cut down on the staggering imports.