Gold imports dip 7% in April-November 22019 to USD 20.6 billion

India's gold imports fell about 7 per cent from April to November of the fiscal year 2019-20. A commerce ministry data says the import in this period fell to 20.6 billion dollars from 22.2 billion dollars in the same period of the previous fiscal.

The decline in gold imports has helped in narrowing the country's trade deficit to 106.8 billion dollars during the eight-month period under review, against 133.7 billion dollars in the year-ago months.

India's gold imports have a bearing on the current account deficit (CAD). The government increased the import duty on the yellow metal by 2.5 per cent to 12.5 per cent from 10 per cent in the year's budget. The duty was slapped on the metal with an aim to mitigate the negative impact of gold imports on the trade deficit and CAD.

RBI data suggests that India's CAD had narrowed to 0.9 per cent of GDP or USD 6.3 billion in the second quarter of the fiscal year from 2.9 per cent or 19 billion dollars in the same quarter of the last fiscal.

Negative Growth

The Commerce Ministry data says that gold import had been recording a negative growth since July 2019; however, it grew about 5 per cent and 6.6 per cent to 1.84 billion dollars in October and 2.94 billion dollars in November respectively.

The country's gold imports dipped about 3 per cent in value terms to USD 32.8 billion in 2018-19.

India & Gold

India is the largest importer of gold - imports 800-900 tonne of gold annually in volume terms - in the world. The imported gold is mainly used to meet the demand of the jewellery industry.