India’s gold imports up 23% in November

The Dollar Business Bureau

India’s gold imports grew 23.24% to $4.36 billion in November compared to $3.54 billion in November last year.

According to the official data, imports of yellow metal grew for the second consecutive month in November by 23.24% to $4.36 billion due to a decrease in prices.

The industry is also guessing other reasons for the decline in the import of the precious metal; among others were Prime Minister Narendra Modi’s decision to demonitise Rs.500 and Rs.1000 rupee notes and the ongoing wedding season.

There were reports after the November 8 announcements that there was a sudden spike in gold demand in the domestic market, as consumers were using their old currency to buy gold.

The imports of gold have been on a decline since February 2016 till September. It recorded a positive growth in October, before falling again in November.

The increase in gold imports also pushed the country’s trade deficit to a two-year high at $13 billion in November from $10.33 billion a year ago.

The domestic jewellery industry imports gold to meet the huge demand of the metal in the country, which, also impacts the country’s current account deficit (CAD).

Silver imports, however, fell 36.33% to $181.41 million in November compared to $285 million in the same month of 2015.

India’s total gold imports declined to 60 tonnes during April-July 2016-17, much lower than 250 tonnes during the corresponding period of last year.

India is the world's second-biggest gold consumer and imported 650 tonnes of the yellow metal in the previous financial year.