Gold imports dip 30% to $31.8 billion in April-February 2023

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| Photo Credit: MUSTAFAH K.K.

India’s gold imports, which have a bearing on the current account deficit, fell about 30% to $31.8 billion during April-February 2023 due to high customs duty and global economic uncertainties, according to data from the commerce ministry.

Imports of the yellow metal stood at $45.2 billion in the corresponding period of 2021-22.

The imports are in the negative zone since August 2022.

Silver imports, however, rose by 66% to $5.3 billion during April-February 2023.

The significant fall in gold imports though has not helped in narrowing the country’s trade deficit — the difference between imports and exports. The merchandise trade deficit for April-February 2022-23 was estimated at $247.52 billion against $172.53 billion in the year-ago period.

According to industry experts, high import duty on gold and global economic uncertainties are the reason for the dip in the imports of the precious metal.

“India imported about 600 tonnes of gold during April-January 2023, and it is down because of high import duty. The government should take a view on the duty part to help domestic industry and push exports,” former GJEPC chairman and managing director of Kama Jewelry Colin Shah said.

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Over the years, it has been observed that any surge in gold prices dampens gold demand coupled with the sale of old gold, and another factor is the higher duty that encourages unofficial routes of gold imports, he added.

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 tonne of gold annually.

Gems and jewellery exports declined by 0.3% to $35.2 billion during the 11 months of the last fiscal. 

Last year, the Centre hiked gold import duty to 15% from 10.75% to check the current account deficit (CAD).