According to economic figures issued by the commerce ministry, India’s gold imports have grown by 73 per cent to $45.1 billion during the April-February period of the current fiscal year, owing to increased demand.
In the April-February 2021 period, imports totalled $26.11 billion. Imports of gold have an overall impact on the country’s current account imbalance.
However, imports of yellow metal fell 11.45 per cent to $4.7 billion in February 2022, according to the trade ministry.
The increase in gold imports over the 11-month period contributed to a $176 billion trade deficit, up from $89 billion in April-February 2021.
After China, India is the world’s second-largest gold consumer. Imports primarily meet the needs of the jewellery sector.
During the first nine months of the current fiscal year, gems and jewellery exports increased by 57.5 per cent to $35.25 billion.
According to the Reserve Bank of India, India’s current account deficit increased to $9.6 billion, or 1.3 per cent of GDP, in the September quarter (RBI).
The current account, which tracks the value of exports and imports of commodities and services, as well as foreign capital transfers, was in surplus both in the previous quarter and year.
In response to increased gold imports, Gem and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah stated that monthly average gold imports between April-February 2022 remain at 76.57 tonnes, which is lower than the typical level. In volume terms, gold imports in April-February 2022 totalled 842.28 tonnes, which was lower than the average imports in the same period, which ranged from 690 to 890 tonnes, he added.