New Delhi: The country's gold imports, which have a bearing on the current account deficit (CAD), increased by 35.5 per cent to USD 11.45 billion (about Rs 80,000 crore) during April-June quarter of the current fiscal, according to commerce ministry data. Imports of the yellow metal stood at USD 8.45 billion (about Rs 59,000 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 percent 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. Increase in gold imports pushed the country's trade deficit marginally to USD 45.96 billion during April-June quarter of 2019-20 as against USD 44.94 billion in the same quarter previous fiscal.
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, due to high duty, businessmen of the sector could shift their manufacturing bases to the neighbouring countries. 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. The country's gold imports dipped about 3 per cent in value terms to USD 32.8 billion during 2018-19.