Business Bureau: THE country’s gold imports which have a bearing on the current account deficit (CAD), increased by 15.4 per cent to USD 13.16 billion (about Rs 92,000 crore) during April-July period of the current fiscal, according to Commerce Ministry data. Imports of the yellow metal stood at USD 11.41 billion (about Rs 80,000 crore) in the same period of 2018-19. CAD, which is the difference between the inflow and outflow of foreign exchange, increased to USD 57.2 billion or 2.1 per cent of GDP in 2018-19 as against 1.8 per cent in the previous year. It stood at USD 48.7 billion in 2017-18.
Since January this year, gold imports have recorded a double-digit growth except in February when it dipped by about 11 per cent. India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually. To mitigate the negative impact of gold imports on trade deficit and CAD, the Government increased the import duty on gold to 12.5 per cent from 10 per cent in this year’s Budget.
According to industry experts, there are apprehensions that sectoral players may shift their manufacturing bases to neighbouring countries due to high import duty on gold in India. The Gems and Jewellery Export Promotion Council (GJEPC) had expressed disappointment over the hike in import duty. Gems and jewellery exports declined 5.32 per cent to USD 30.96 billion in 2018-19.