Gold imports fell by 25 per cent to USD 8.43 billion in the first quarter of the current fiscal due to sliding prices of the metal in both global and domestic markets. According to the commerce ministry data, gold imports had amounted to USD 11.26 billion in the corresponding quarter of last financial year, 2017-18.
The imports of the metal have been declining since January this year. The contraction in gold imports help contain the current account deficit (CAD). CAD, which is the difference between the inflow and outflow of foreign exchange, jumped to USD 48.7 billion, or 1.9 per cent of GDP, in 2017-18 fiscal.
This was higher than USD 14.4 billion, or 0.6 per cent, CAD in 2016-17 fiscal. With rising oil prices, depreciating rupee and outflow of portfolio investments, there are concerns that CAD might rise in the current fiscal. The rise in crude oil prices and imports too have impacted the trade deficit, which widened to USD 44.94 billion during April-June this fiscal as against USD 40 billion in the same period of 2017-18.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. The gems and jewelery exports in June grew by about 3 per cent to USD 3.5 billion. As per the data, silver imports grew by 104.5 per cent to USD 364.24 million in June.
The country imports 700-800 tonnes of gold annually.
