Before the implementation of GST from July 1 India’s large gold imports in 30 months have made the trade deficit grow further and become the highest.
When seen on YOY basis, in May the exports of the country rose by 8.3% and reached $24 billion, as per the data made by the commerce ministry. However, when compared with last year data the imports grew by 33% and reached $37.8 billion. In May this year, the trade deficit was at $13.84 billion which was only $6.2 billion in the same month last year.
The robust local demand has been seen as the non-¬oil; non-¬gold imports grew and reached 19.8%. In May Merchandise exports grew and the exports like petroleum products, engineering goods, gems and jewellery, and food products like marine products and rice were highest. In May also the imports of gold, silver and precious and semi¬-precious stones grew by 128% and it has made a record. By just 6% in the month gems and jewellery, exports have also increased.
Out of 30 sectors last nine and twenty-one, the exports have been rising continuously and have reported a hike in shipments. When seen on the YOY basis in readymade garment sector8% growth was seen which is of value $1.6 billion in the month of May. The value $6.2 billion which was 8.25% growth was seen in engineering goods shipments.
The main reason for trade deficit is gold imports were 236% higher at $4.9 billion. In May Electronic goods import saw a 34% rise and reached to $4.15 billion. Due to higher prices by 29.5%, Oil imports of the country also increased and reached to $7.7 billion in the month of May.
3 % tax would be applicable on gold, silver, gold jewellery and processed diamonds once the GST is rolled out. The consumers will have to shell out 13% tax on gold jewellery as the current import duty is 10% that is higher than 12.5% prevailing now. 10% import duty, 1% VAT, 1% excise duty and 0.5% cess is in total 12.5%.