India’s gold import more than doubled to $16.95 bn in Apr-Sep

The Dollar Business Bureau

India’s gold import more than doubled to $16.95 billion during the first six months of the current financial year, as per the data by Ministry of Commerce.

The imports of the precious metal were around $6.88 billion during the period April- September last fiscal, the data said.

However, the import of gold dropped by 5% to $1.71 billion in the month of September this year as compared to $1.80 billion in the same month a year ago.

The decline in the precious metal import in September helped in narrowing down of country's trade deficit to $8.98 billion, a seven month low.

However, the import of gold is likely to increase due to festival season, which has begun this month.

Due to increase in gold imports, the current account deficit (CAD) has been surged to $14.3 billion, or 2.4% of Gross Domestic Product (GDP), in the quarter April to June of the current fiscal.

CAD generally refers to the difference between the value of goods and services import and value of goods and services export that also impact the exchange rate.

Concerned over the increase in gold imports, India has also restricted inbound shipments of gold from South Korea, with which it has a free trade agreement.

India is the second largest gold consumer in the world after China. The country mainly import the metal to meet the demand of jewellery industry.

Currently, the import of gold attracts a duty of 10%. Time and again, the gems and jewellery sector, along with the Ministry of Commerce, have urged the Ministry of Finance to consider a reduction in the import duty.