The data published by the Indian Commerce Ministry suggests notable decline in gold imports by the country during Apr ’18-Feb ’19. In value terms, the imports dropped by around 5.5% to total $29.5 billion, as compared with the total imports of $31.2 billion during the corresponding eleven-month period the previous fiscal.
The dip in gold imports is likely to help the country in narrowing its Current Account Deficit (CAD), the Commerce Ministry noted. The country’s CAD had widened to 2.9% of the GDP during the second quarter of the fiscal.
For the month of Feb ’19 alone, the imports totaled $2.58 billion by value. This is considerably lower by 10.8% from February 2018. The imports in the opening month of the current year had reported 38% year-on-year surge to total $2.31 billion by value. It must be noted that the final three months of 2018 had reported negative growth when matched with the corresponding months a year before.
The Commerce Ministry cites softening of international gold prices as the key reason for the dip in imports. The considerable drop in retail demand too has contributed to reduced imports of the yellow metal. Other government actions including restrictions on duty-free gold imports from South Korea under Free Trade Agreement, imposition of self-use condition on Premier Trading Houses to limit direct gold imports from overseas bullion suppliers and reluctance to bring down high 10% import duty on gold are also some other reasons for the fall in imports.
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