Overview
India’s gold imports have witnessed a substantial surge of 26.7% to reach $35.95 billion during the April-December period of the fiscal year. This notable increase, compared to the same period the previous year, can be attributed to robust demand for the precious metal. The month of December alone recorded an impressive surge of 156.5%, with gold imports amounting to $3 billion.
Key Statistics
- April-December Performance: Gold imports in the stated period reached $35.95 billion, compared to $28.4 billion in the corresponding period the previous year, indicating a growth of 26.7%.
- December 2023 Surge: In December 2023, gold imports experienced a remarkable spike, soaring by 156.5% to touch $3 billion, showcasing heightened demand for the precious metal.
- Top Sources: Switzerland emerged as the largest source of gold imports, contributing approximately 41% of the total share. The United Arab Emirates (UAE) and South Africa followed, accounting for around 13% and 10%, respectively.
- Trade Deficit: Despite the significant rise in gold imports, India’s overall trade deficit, reflecting the difference between imports and exports, narrowed to $188.02 billion in the first three-quarters of the fiscal year. This is a reduction from the trade deficit of $212.34 billion recorded in April-December 2022.
- Import Duty: Currently, there is a 15% import duty imposed on gold in India.
- Global Standing: India holds the position of the world’s second-largest gold consumer, following China. The surge in gold imports primarily caters to the demand within the jewelry industry.
- Gems and Jewellery Exports: Despite the positive trend in gold imports, exports in the gems and jewellery sector experienced a decline of 16.16%, amounting to $24.3 billion during the same period.
- Current Account Deficit: India’s current account deficit showed a notable decline, reaching 1% of the GDP or $8.3 billion in the second quarter of the financial year. This reduction is attributed to a lower merchandise trade deficit and growth in services exports, as per data released by the Reserve Bank of India (RBI) on December 26, 2022.
Conclusion
The surge in gold imports underscores India’s enduring appetite for the precious metal, with the demand driven by various factors, including cultural affinity, investment preferences, and the needs of the jewelry industry. Despite the increase in gold imports, the narrowing trade deficit suggests a balanced economic scenario in the country.
