Gold Imports Surge Five-fold To $3.75 Billion In September

On account of the ongoing festive season in India, Gold imports surged five-fold to $3.75 billion in September as compared to $682.5 million in the same month last year.

Notably, the high imports have pushed up the country's trade deficit to about 18-month high of $14.2 billion in the month under review.

After the government had imposed restrictions on inbound shipments of the precious metal to narrow the Current Account Deficit (CAD), which is the excess of foreign exchange outflows over inflows, gold imports were down for quite a long time.

In 2012-13, India's CAD touched a historic high of 4.8% of GDP, mainly due to rising imports of petroleum products and gold.

However, it came down sharply to 1.7% of GDP in the April-June quarter of this fiscal due to decline in gold imports.

The new government at the Centre had increased customs duty on gold to 10% and banned import of gold coins and medallions. India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry.

The Commerce and Industry Ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports. In August, the imports increased to $2.03 billion from 738.7 million in August 2013.
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