Gold imports plunges to $650 million in August
New Delhi: Gold imports have fallen sharply to USD 650 million in August on account of a slew of steps taken by government to curb inbound shipments of the precious metal, a development that will help narrow the record current account deficit.
Gold imports in July stood at USD 2.2 billion.
Total merchandise imports have also declined, helping narrowing the trade deficit which stands at four-month low of USD 10.91 billion in August this year compared to USD 14.17 billion in August 2012, according to the Commerce Ministry.
Commerce and Industry Minister Anand Sharma said the fall in imports is expected to continue in the coming months. It, however, would not impact the jewellery sector exports as "enough gold is available".
The current account deficit (CAD) touched a historic high of 4.8 per cent of GDP in the last fiscal. The rise in CAD was mainly attributed to high imports of gold and petroleum products. High levels of CAD puts pressure on rupee, which touched life-time low 68.85 against US dollar last month, exposing the economy to balance of payments problems.
Rupee has depreciated about 19 per cent during the last four months.
In the first five month of this year, the gold and silver imports were USD 7.4 billion, USD 5.7 billion, USD 3.3 billion, USD 7.5 billion and USD 8.4 billion respectively.
To curb demand, month the government had hiked import duty for the third time in a year to 10 per cent from 8 per cent and also banned imports of gold coins and medallions.
Further, the RBI also restricted the import of gold on a consignment basis by banks.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. imports stood at around 830 tonne in 2012-13.