Gold imports fell 7% in April-November to $ 20.57 billion

NEW DELHI: India gold imports , which influence the current account deficit (CAD), fell about 7 percent to $ 20.57 billion during the period from April to November of the current financial year, according to data from the Ministry of Commerce.

Yellow metal imports were $ 22.16 billion in the same period of 2018-19.

The decline in gold imports has helped in narrowing the country's trade deficit to $106.84 billion during the eight-month period under review as against $133.74 billion in the year-ago months.

The import of gold had registered a negative growth since July of this year. However, it grew around 5 percent to $ 1.84 billion in October and 6.6 percent to $ 2.94 billion in November.

India is the largest importer of gold, which mainly caters to the demand of the jewelry industry.

In terms of volume, the country imports between 800 and 900 tons of gold per year.

To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on the metal to 12.5 per cent from 10 per cent in this year's Budget.

Industry experts say that companies in the sector are changing their manufacturing bases to neighboring countries due to this high duty.

The Gem and Jewelry Export Promotion Council (GJEPC) requested a reduction of the import tariff to 4 percent.

Exports of gems and jewels decreased around 1.5 percent to $ 20.5 billion in April-November this fiscal year.

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

The CAD fell to 0.9 percent of GDP or $ 6.3 billion in July-September, 2019-20 from 2.9 percent or $ 19 billion in the same period last year, according to RBI data.