During first six months of FY2017-18, the gold imports of the country increased more than 200% and reached a value of $16.95 billion. During the first half of FY2016-17 gold, import was worth $6.98 billion, this data has been taken from the commerce ministry.
This year in September, the import of gold fell by 5% which is $1.71 billion from $1.80 billion when compared to the same month of the last year. In the last month, the fall in gold import did narrow down the country’s trade deficit to $8.98 billion that is a seven month low.
This month as the festival season has started, it is expected that gold import will increase. Due to an increase in the gold imports, the current account deficit (CAD) of the country widened. The CAD reached $14.3 billion which is 2.4% of the GDP during April-June 2017.
The country has a free trade agreement in the incoming shipments from South Korea and the Indian government had restricted the gold imports as it was concerned over an increase.
After China, the second largest gold consumer in the world is India. Mainly to fulfil the demand of the jewellery industry, the gold is imported. At present, with 10% duty Gold import is charged. To reduce the duty on the precious metal, the gems and jewellery industry have been requesting the finance ministry.