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<keyword id="3658" type="General" weightage="80" keywordseo="india" source="Orion">India</keyword>'s software export revenue and remittances act as a strong counter-cyclical buffer against the increase in current account deficit (<keyword id="52599" type="General" weightage="80" keywordseo="cad" source="Orion">CAD</keyword>) due to a hike in global oil prices and rupee depreciation, said the State Bank of India's (SBI) Chief Economic Adviser. In a research report Dr <keyword id="6448502" type="General" weightage="50" keywordseo="soumya-kanti-ghosh" source="Orion">Soumya Kanti Ghosh</keyword>, Group Chief Economic Adviser, SBI, said for every rupee depreciation, software exports increase by $250 million. <keyword id="4757" type="General" weightage="80" keywordseo="ghosh" source="Orion">Ghosh</keyword> said contrary to the expectations, the Q1FY23 Balance of Payments (BOP) numbers have shown a strong counter-cyclical buffer in the form of service exports and remittances. For example, in Q1, India's CAD was expected to reach $30 billion/3.8 per cent of gross domestic product (GDP), but the actual numbers came in at 2.8 per cent of GDP. The positive surprise was because of strong remittances and software exports, the CAD got a lift of 60 basis points, Ghosh said. "We expect that if such trends of strong remittances and software exports have continued (<keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword> data suggests software exports in Q2 were strong) in Q2, and India's CAD comes in below the threshold level of 3.5 per cent of GDP in Q2, the CAD for FY23 could still be closer to 3 per cent benchmark and not in excess of 3.5 per cent of GDP," he added. Also, forex reserves could jump by another $5 billion as swap transactions reverse and thus have a positive impact on the rupee as is being currently witnessed, he noted. To understand the factors that are impacting India's CAD, Ghosh worked on the structural vector auto-regressions (SVAR) model. With oil forming 30 per cent of India's import bill, it has a major impact on macroeconomic variables. An increase in oil import price impacts directly the trade deficit and consequently, CAD gets widened. That apart, it also results in inflation. According to Ghosh, the SVAR model introduces a counter-cyclical response to increased oil prices in the form of software service exports that is impacted positively because of rupee depreciation. "Although remittances are positively impacted, we have not considered them in our SVAR model because of data volatility." The results of the SVAR model clearly give an idea of the negative impact of oil price shock on CAD, inflation and growth in one direction and the positive impact of software exports on CAD as a result of rupee depreciation. In particular, a positive shock to oil prices leads to an immediate and sharp increase in CAD, which dissipates completely in about eight quarters. The trade deficit also increases up to two quarters after the initial positive oil price shock, he said. "This implies that India's trade deficit may already have been adversely impacted for the first half of the current fiscal because of the oil price shock," Ghosh said. In the case of GDP, a positive shock to oil prices leads to an immediate decline, which however starts reversing after the third quarter and completely dissipates after the seventh quarter. "This implies that India's first-half GDP growth in FY23 could have been impacted because of the oil price shock. Most interestingly, the rupee-dollar exchange rate also gets impacted and it depreciates slightly after an increase in oil prices till three quarters following which it starts appreciating," he said. As a result, the rupee outlook is likely to improve in Q4 of FY23. The impact of oil price on consumer price index (CPI) inflation will dissipate after four quarters and it means that the CPI inflation outlook for FY24 will be consistent with RBI's forecast of 5 per cent. Ghosh said India's software exports are on the rise with the share of the offsite mode of exports by Indian IT service companies increasing to 88.8 per cent in FY22 compared to 82.8 per cent five years ago. Ghosh said a $10 increase in crude oil prices leads to an increase of 40 bps in CAD, 50 bps in CPI and a 23 bps decline in growth with software exports acting as a counter-cyclical buffer. "The exchange rate pass-through from variance decomposition method shows it is at least 10 per cent for CAD, inflation and growth, but significantly stronger at 35 per cent for software exports. For every rupee depreciation, software exports increase by $250 million," Ghosh added. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/bears-weigh-on-indian-markets-due-to-negative-global-cues/articleshow/95418328.cms">Bears weigh on Indian markets due to negative global cues</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/fusion-micro-finance-ipo-allotment-how-to-check-allotment-status-listing-date-and-more/articleshow/95407416.cms">Fusion Micro Finance IPO allotment – How to check allotment status, listing date and more</a>

For every rupee depreciation, software exports increase by $250 mn: SBI Chief Economic Advisor

India's <keyword id="183320" type="UNKNOWN" weightage="100" keywordseo="current-account-deficit">current account deficit</keyword> (CAD) narrowed to 1.7% of <keyword id="35050" type="CITY" weightage="80" keywordseo="gdp">GDP</keyword> in the April-June quarter of FY2014-15. This was mainly due to a reduction in <keyword id="113688" type="UNKNOWN" weightage="100" keywordseo="trade-deficit">trade deficit</keyword> and fall in gold imports. 
 "The lower CAD was primarily on account of a contraction in the trade deficit contributed by both a rise in exports and a decline in imports," <keyword id="30067" type="ORGANIZATION" weightage="80" keywordseo="RBI">RBI</keyword> said. 
 
CAD narrowed $7.8 billion (1.7% of GDP) from $21.8 billion (4.8% of GDP) in the year-ago period. 
 
There was a huge fall of 57.2% in gold imports, amounting to $7 billion, which is lower than $16.5 billion in the April-June quarter of FY2013-14, RBI said. 
 
The trade deficit decreased by 31.4% to $34.6 billion in Q1 of FY2014-15 as compared to $50.5 billion in Q1 of FY2013-14. 
 
The CAD had reached $87.8 billion in FY2012-13 due to a sharp increase in gold imports. 
 
According to the Balance of Payments (BoP) data, on net basis, both foreign direct investment and portfolio investment recorded inflows in the first quarter of 2014-15. 
 
"There was a net accretion of $11.2 billion to India's foreign exchange reserves in the first quarter of 2014-15 as against a draw down of $0.3 billion in Q1 of 2013-14," RBI said.

CAD Dips To 1.7% In Q1 As Trade Deficit Declines

Mumbai (Maharashtra) [India], September 28 (ANI): The <keyword id="6354335" type="General" weightage="50" keywordseo="reserve-bank-of-india" source="Orion">Reserve Bank of India</keyword> (<keyword id="30067" type="General" weightage="50" keywordseo="rbi" source="Orion">RBI</keyword>) has released preliminary data on India's Balance of Payments (BoP) for the first quarter (Q1) of the fiscal year 2023-24, covering the period from April to June. The data reveals significant developments and trends in India's economic position on the global stage. One of the standout features of India's BoP in Q1: 2023-24 was the substantial narrowing of the Current Account Deficit (<keyword id="52599" type="General" weightage="50" keywordseo="cad" source="Orion">CAD</keyword>). The CAD decreased to USD 9.2 billion, equivalent to 1.1 per cent of GDP, showing an improvement from USD 17.9 billion, or 2.1 per cent of GDP, in the same quarter of the previous fiscal year (Q1: 2022-23). However, it was higher than the CAD recorded in the preceding quarter, which stood at USD 1.3 billion (0.2 per cent of GDP). The widening of the CAD on a quarter-on-quarter basis was primarily attributed to several factors. A higher trade deficit, coupled with a decrease in the surplus of net services and a decline in private transfer receipts, contributed to this trend. Net services receipts registered a sequential decrease in Q1: 2023-24, mainly due to a decline in exports of computer, travel, and business services. However, it's important to note that these receipts remained higher on a year-on-year basis. Private transfer receipts, primarily consisting of remittances by Indians employed overseas, moderated to USD 27.1 billion in Q1: 2023-24 from USD 28.6 billion in the previous quarter (Q4: 2022-23). Despite this decrease, they witnessed an increase on a year-on-year basis. The income account, which reflects payments of investment income, showed a decline to USD 10.6 billion in Q1: 2023-24 from USD 12.6 billion in Q4: 2022-23. However, this figure was still higher than the previous year. In the financial account, notable changes were observed. Net foreign direct investment decreased to USD 5.1 billion in Q1: 2023-24 from USD 13.4 billion a year ago. Net foreign portfolio investment recorded significant inflows of USD 15.7 billion compared to net outflows of USD 14.6 billion in Q1: 2022-23. Net external commercial borrowings to India recorded an inflow of USD 5.6 billion in Q1: 2023-24, contrasting with an outflow of USD 2.9 billion in the previous year. Non-resident deposits recorded net inflows of USD 2.2 billion in Q1: 2023-24, a notable increase compared to USD 0.3 billion in Q1: 2022-23. As of the end of June 2023, India's external debt reached USD 629.1 billion. This marked an increase of USD 4.7 billion over its level at the end of March 2023. The data from RBI's Balance of Payments report for Q1: 2023-24 reflects the dynamic nature of India's economic landscape. Despite fluctuations, the narrowing of the current account deficit and increased foreign investment inflows signal positive developments in India's global economic interactions. Analysts and policymakers will closely monitor these trends, as they have significant implications for India's overall economic stability and prospects in the coming fiscal year.

India's balance of payments shows improvement in Q1 FY24

OCD or obsessive compulsive disorder can be synonymous to India’s obsession with <keyword id="18712" type="ENTERTAINMENT" weightage="40" keywordseo="Gold">gold</keyword>. The yellow metal has always been the most sought-after investment avenue across the country. However, this obsession for gold has been negative for the country’s trade balance due to increase in imports bill. 
 
Gold &amp; CAD India’s trade deficit has been fuelled by high imports of gold and crude oil, contributing to the current account deficit (CAD), which has touched an all-time high of 4.8% of <keyword id="35050" type="CITY" weightage="40" keywordseo="gdp">GDP</keyword> or $88.2 billion, in 2012-13. During the first half of the current fiscal, gold and silver imports rose 8.7% to $23.1 billion. Oil imports during April-September also grew 3.58% to $82.87 billion. In contrast, non-oil imports declined 4.55% to $149.35 billion. In September this year, these dipped 24.19% to $21.24 billion. Therefore, gold import is mainly responsible for the rise in CAD and impacts the <keyword id="163339" type="UNKNOWN" weightage="40" keywordseo="foreign-exchange-reserves">foreign exchange reserves</keyword> of the country, as well as the value of <keyword id="6355302" type="ORGANIZATION" weightage="40" keywordseo="Rupee">rupee</keyword>. 
 
 
 
 
 
RBI stance on gold The Reserve Bank of India (RBI) and the <keyword id="44734" type="ORGANIZATION" weightage="40" keywordseo="Indian-Government">Indian government</keyword> battling a record high trade deficit, coupled with weak Rupee, are trying to curb gold imports, the most expensive non-essential item in its imports bill. The more Indians buy gold and buy it with dollars, the money moves out of the country, pushing the Rupee downwards. 
 
The RBI introduced the 80:20 scheme in July, under which 20% of the gold purchased from overseas had to be exported to avail further import of the metal. The restriction was aimed at curbing the widening current account deficit. Moreover, in a bid to fight the rising gold imports, the government has been raising the import duty on gold over the past few months – from 1% in January 2012 to the current 10%. In September this year, it also increased the import duty on gold jewellery to 15% from the previous 10%, in an effort to protect the local gem and jewellery manufacturers and exporters from gold jewellery imports. 
 According to government data released in October this year, gold imports during July-September 2013 was pegged at 63.13 tonne, valued at $2.69 billion, which was down 28% in volume and 77% in value over the corresponding 2nd quarter of the previous fiscal. This prompted a statement from the <keyword id="47209" type="ORGANIZATION" weightage="40" keywordseo="Finance-Ministry">Finance Ministry</keyword> who reiterated that this would enable the CAD to be limited to $70 billion as per the target. India’s gold imports in August dipped to $0.65 billion from $2.9 billion in July and a record $8.4 billion in May. 
 
Price trends in metros &amp; non-metros During April-June 2013, NHB Residex shows fall in real prices (inflation-adjusted), mostly in metros like Chennai, Hyderabad, <keyword id="6354925" type="COMPANY" weightage="40" keywordseo="Kolkata">Kolkata</keyword> and Bangalore, whereas marginal increase was seen in Delhi and Mumbai. 
 
India’s foreign trade and future outlook 
India’s trade deficit improved substantially in September 2013, raising hopes that the FY14 CAD will be much lower than the government’s estimate ($70 billion). At $6.8 billion, the September trade deficit touched the lowest level in 30 months. Exports during September, 2013 were valued at $27,679.33 million (₹1,76,461.53 crore), which was 11.15 % higher in dollar terms. Imports during the same period were valued at $34,439.50 million (₹ 2,19,559.04 crore) – representing a negative growth of 18.10 % in dollar terms and a negative growth of 4.38 % in rupee terms. 
 
Imports have been on a downward trajectory of late, with the sharpest fall seen in September 2013. 
 
The government’s and the RBI’s efforts in curbing gold imports helped to lower the demand for gold after the April-May spurt. Gold imports for August and September stood at $1.5 billion, the lowest in 52 months. 
 
Lower industrial growth has also led to muted demand for non-oil, non-gold imports. For April-August period this year, machinery and project goods imports were down 12% and 38% YoY, respectively. Industrial growth recovery during the 2nd half of FY14 is likely to revive non-oil, non-gold imports, potentially reviving overall imports. Having said that, overall trade deficit in FY14 will still be lower than FY13 as export growth will remain favourable and imports will be well contained. 
 Financial inclusion through financial literacy with help from banks and other financial intermediaries is also required as most Indians refrain from participating in the <keyword id="6357264" type="ORGANIZATION" weightage="40" keywordseo="capital-market">capital market</keyword> due to lack of knowledge. Financial literacy is crucial in creating awareness about the way capital market functions and also about the fact that the <keyword id="44794" type="UNKNOWN" weightage="40" keywordseo="Equity-market">equity market</keyword> provides relatively higher returns, coupled with higher risks, as compared to other <keyword id="6362476" type="ORGANIZATION" weightage="40" keywordseo="investments">investments</keyword> like gold or real estate. 
 
 
The author of this article is the Director of WealthRays Securities.

Gold Mania Virtually Over In India?

New Delhi, Jan 2 () India's gold imports, which have a bearing on the current account deficit (CAD), fell about 7 per cent to USD 20.57 billion during April-November period of the ongoing financial year, according to the commerce ministry data.
Imports of the yellow metal stood at USD 22.16 billion in the same period of 2018-19.
The decline in gold imports has helped in narrowing the country's trade deficit to USD 106.84 billion during the eight-month period under review as against USD 133.74 billion in the year-ago months.
Gold import had been recording a negative growth since July this year. However, it grew about 5 per cent to USD 1.84 billion in October and 6.6 per cent to USD 2.94 billion in November.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry.
In volume terms, the country imports 800-900 tonne of gold annually.
To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on the metal to 12.5 per cent from 10 per cent in this year's Budget.
Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to this high duty.
 The Gems and Jewellery Export Promotion Council (GJEPC) has asked for a reduction in import duty to 4 per cent.
 Gems and jewellery exports declined about 1.5 per cent to USD 20.5 billion in April-November this fiscal.
The country's gold imports dipped about 3 per cent in value terms to USD 32.8 billion in 2018-19. 
The CAD narrowed to 0.9 per cent of GDP or USD 6.3 billion in July-September, 2019-20 from 2.9 per cent or USD 19 billion in same period last year, according to the RBI data. 
 RR ANU
ANU

Gold imports dip 7 pc in Apr-Nov to USD 20.57 bn

Mumbai, Mar 12 () India's current account deficit narrowed sharply to USD 1.4 billion or 0.2 per cent of GDP in the December quarter, the Reserve Bank said on Thursday.The deficit was at 2.7 per cent of the GDP in the year-ago period and 0.9 per cent in the preceding quarter.The sharp contraction was primarily due to a lower trade deficit at USD 34.6 billion, and a rise in net services receipts, the central bank said.The CAD is a critical indicator of the macroeconomic health and represents the gap between the overall foreign exchange expended and received in the economy.The data also comes on a day when the rupee depreciated to a 17-month low of 74.24 against the US dollar.For the first nine months of the fiscal year, the CAD has narrowed to 1 per cent of the GDP. AA RAM

India's current account deficit narrows to $1.4 bln in December quarter

<ul><li>In order to reduce <keyword id="35091" type="CITY" weightage="20" keywordseo="imports">imports</keyword> and lower the <keyword id="44844" type="ORGANIZATION" weightage="20" keywordseo="Trade">trade</keyword> deficit, <keyword id="3658" type="LOCATION" weightage="20" keywordseo="India">India</keyword>’s finance ministry has announced a hike in import <keyword id="6361864" type="UNKNOWN" weightage="20" keywordseo="Tariffs">tariffs</keyword> on 19 categories of products it deems as “non-essential”. </li><li>The items in question ranged from large household appliances like washing machines, ACs and refrigerators to radial tyres and aviation turbine fuel to jewelry, footwear, tableware, furniture fittings and suitcases. </li><li>Taken together, these products comprised ₹860 billion worth of imports in 2017-18. </li></ul>Earlier this month, the Indian government unveiled <a href="https://in.reuters.com/article/india-rupee/india-outlines-series-of-measures-to-stem-declines-in-rupee-idINKCN1LU2BL">a host of measures </a>to halt the freefall of the <keyword id="6355302" type="UNKNOWN" weightage="20" keywordseo="Rupee">rupee</keyword> and contain its widening current account deficit, which stood at 2.4% of GDP at the end of June. This included a relaxation in overseas borrowing restrictions for Indian manufacturers, tax benefits for investors purchasing rupee-denominated bonds and allowing overseas banks to underwrite these bonds and finally, a reduction in “non-essential” imports. In order to reduce imports and lower the trade deficit, India’s finance ministry has announced a hike in import tariffs on 19 categories of products it deems as “non-essential” or to put it bluntly, products purchased by relatively well-off households. This will result in a ₹40 billion increase in tax revenues for the government. The items in question ranged from large household appliances like speakers, washing machines, ACs and refrigerators to radial tyres and aviation turbine fuel to jewelry, footwear, tableware, furniture fittings and suitcases. Taken together, these products comprised ₹860 billion worth of imports in 2017-18. The import hike on household electronic appliances, a significant portion of which come from China, could dampen sales slightly this festive season. Also, the levying of a 5% duty on aviation turbine fuel is expected to add to the woes of the aviation sector, which is already struggling with high prices of crude oil. This will likely result in higher airfare for passengers. Meanwhile, the hike in duties on jewelry will likely hurt importers of diamonds, but will benefit domestic gold jewellers, as the duty on gold has been left unchanged at 10%. The tariff hikes will be effective today. In order to further curtail the trade deficit, the Indian government will also try and boost exports. Suresh Prabhu, India’s commerce and industry minister, has reportedly asked the finance ministry to devise measures to increase the flow of credit to exporters. In addition, the commerce and industry ministry is said to be reviewing a plan to increase exports by as much as 20% by promoting key sectors such as agriculture, pharmaceuticals and textiles.

India continues its defense of the rupee by hiking import duties on 19 products

Mumbai, Dec 31 () India's current account deficit (CAD) narrowed to 0.9 per cent of GDP, or USD 6.3 billion, in the September 2019 quarter, on account of lower trade deficit.
 It had stood at 2.9 per cent of gross domestic product (GDP), or USD 19 billion, in the corresponding quarter of 2018-19.
 On a sequential basis, CAD had printed 2 per cent of GDP, or USD 14.2 billion, in the June 2019 quarter.
 The current account deficit is the difference between foreign exchange inflows and outflows.
 "The contraction in the CAD was primarily on account of a lower trade deficit at USD 38.1 billion as compared with USD 50 billion a year ago," the Reserve Bank of India (RBI) said in a release on Tuesday.
 During the first half of the current financial year, CAD narrowed to 1.5 per cent of GDP from 2.6 per cent in the corresponding period in 2018-19, on the back of a reduction in the trade deficit, which shrank to USD 84.3 billion as compared with USD 95.8 billion a year ago.
 The trade deficit is the gap between the value of imports and exports.
 The balance of payment stood at USD 5.12 billion in the second quarter and USD 19.10 billion during the first half of this fiscal.
 Net foreign direct investment stood at USD 7.4 billion, almost the same level as in second quarter of 2018-19.
 Helped by net purchases in the debt market, foreign portfolio investment recorded a net inflow of USD 2.5 billion in the September 2019 quarter, against an outflow of USD 1.6 billion a year ago.
 In the April-September 2019 period, while the net FDI inflows were at USD 21.2 billion, portfolio investment recorded a net inflow of USD 7.3 billion.
 Net services receipts increased 0.9 per cent on in July-September on a y-o-y basis, on the back of a rise in net earnings from computer, travel and financial services, the RBI said.
 In the second quarter of 2019-20, private transfer receipts, mainly representing remittances by Indians employed overseas, rose to USD 21.9 billion, an increase of 5.2 per cent as against a year ago.
 The net inflow on account of external commercial borrowings to the country was USD 3.2 billion in the second quarter as compared with USD 2 billion in corresponding period of the previous financial year.
 There was a growth of USD 5.1 billion in the foreign exchange reserves in the September 2019 quarter, compared with a depletion of USD 1.9 billion a year ago.
 During the first half of 2019-20, there was an accretion of USD 19.1 billion of the foreign exchange reserves, the RBI said. HV HRS

CAD narrows to 0.9 pc of GDP in Sept quarter on lower trade deficit: RBI

New Delhi, Jan 13 () The commerce ministry has sought reduction in the import duty on gold in the forthcoming budget with a view to pushing exports and manufacturing of the gems and jewellery sector, a source said.
 In its budget proposals, the ministry has suggested its finance counterpart to consider a significant reduction in the import duty on the yellow metal, they said.
 In the last Budget, the government has increased the import duty on the yellow metal to 12.5 per cent.
 The gems and jewellery export industry has sought reduction in the import duty to 4 per cent in the budget, which is scheduled to presented on February 1.
 Gold imports in December declined sharply to 39 tonnes, from 152 tonnes in November.
 India's gold imports, which have a bearing on the current account deficit (CAD), fell about 7 per cent to USD 20.57 billion during April-November period of the ongoing financial year, according to the commerce ministry data.
 Imports of the yellow metal stood at USD 22.16 billion in the same period of 2018-19.
 The decline in gold imports has helped in narrowing the country's trade deficit to USD 106.84 billion during the eight-month period under review as against USD 133.74 billion in the year-ago months.
 Gold import had been recording a negative growth since July this year. However, it grew about 5 per cent to USD 1.84 billion in October and 6.6 per cent to USD 2.94 billion in November.
 India is the largest importer of gold, which mainly caters to the demand of the jewellery industry.
 In volume terms, the country imports 800-900 tonne of gold annually.
 To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on the metal to 12.5 per cent from 10 per cent in this year's budget.
 Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to this high duty.
 Gems and jewellery exports declined about 1.5 per cent to USD 20.5 billion in April-November this fiscal.
 The country's gold imports dipped about 3 per cent in value terms to USD 32.8 billion in 2018-19.
 The CAD narrowed to 0.9 per cent of GDP or USD 6.3 billion in July-September, 2019-20 from 2.9 per cent or USD 19 billion in same period last year, according to the RBI data. RR RR MR
MR

Commerce Ministry proposes cut in gold import duty in Budget

New Delhi, Jan 26 () Gold imports, which have a bearing on the current account deficit (CAD), fell 6.77 per cent to USD 23 billion during the April-December period of the current financial year, according data from the commerce ministry.
 Imports of the yellow metal stood at USD 24.73 billion in the corresponding period of 2018-19.
 The decline in gold imports has helped in narrowing the country's trade deficit to USD 118 billion during the period, against USD 148.23 billion a year ago.
 Gold imports had been recording a negative growth since July this year. However, it recorded positive growth in October and November last year, only to contract by about 4 per cent in December last year.
 India is the largest importer of gold, which mainly caters to the demand of the jewellery industry.
 In volume terms, the country imports 800-900 tonne of gold annually.
 To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on the metal to 12.5 per cent from 10 per cent.
 Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to this high duty.
 The Gems and Jewellery Export Promotion Council (GJEPC) has asked for a reduction in import duty to 4 per cent.
 Gems and jewellery exports declined 6.4 per cent to USD 27.9 billion in April-December this fiscal.
 The country's gold imports dipped about 3 per cent in value terms to USD 32.8 billion in 2018-19.
 The CAD narrowed to 0.9 per cent of gross domestic product or USD 6.3 billion in July-September 2019 from 2.9 per cent or USD 19 billion in corresponding period last year, according to the RBI data. RR HRS

Gold imports dip 6.77 pc during April-Dec 2019

New Delhi, Mar 15 () Gold imports, which have a bearing on the country's current account deficit (CAD), fell 8.86 per cent to USD 27 billion (about Rs 1.90 lakh crore) during April-February period of the current financial year, according to commerce ministry data. Imports of the yellow metal stood at USD 29.62 billion in the corresponding period of 2018-19. The decline in gold imports has helped in narrowing the country's trade deficit to USD 143.12 billion during April-February period of the current fiscal, as against USD 173 billion a year ago. Gold imports have been recording negative growth since December last year. India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually. To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on the metal to 12.5 per cent from 10 per cent. Industry experts claim that businesses in the sector are shifting their manufacturing bases to neighbouring countries due to the high duty. Gems and jewellery exporters had asked for reduction in import duty to 4 per cent. Gems and jewellery exports declined 8.25 per cent to USD 33.78 billion in April-February this fiscal. The country's gold imports dipped by 3 per cent in value terms to USD 32.8 billion in 2018-19. The CAD, which is the difference between inflow and outflow of foreign exchange, narrowed to 0.9 per cent of gross domestic product (GDP) or USD 6.3 billion in July-September 2019, from 2.9 per cent of GDP or USD 19 billion in the corresponding period last year, according to the Reserve Bank's data. RR ABM

Gold imports dip 8.86 pc to USD 27 bn during Apr-Feb 2020

The Indian <keyword id="6355302" type="General" weightage="20" keywordseo="rupee" source="Orion">rupee</keyword> plunged to a 12-month low of 83.28 against the US dollar on Monday amid rising oil prices and uncertainty in global markets due to the ongoing Israel-Hamas war. The <keyword id="30067" type="General" weightage="20" keywordseo="rbi" source="Orion">RBI</keyword> has been intervening periodically to sell dollars in the market to prevent the rupee from going into a free fall, according to traders. The benchmark Brent crude was hovering at close to $91 a barrel after having jumped nearly 6 per cent on Friday. While Israel is poised to carry out its ground attack in Gaza, there are fears that the tensions may escalate into a wider geopolitical crisis with the US and Iran getting involved. This could lead to a disruption in the flow of oil from the Middle East region. The US has already moved two aircraft carriers into the Mediterranean Sea, while Iran has issued statements in support of Hamas while criticising Israel. Oil prices soared nearly 30 per cent in the three months to September, the biggest third-quarter gain in almost two decades. With rising crude oil prices in the international market pushing up the demand for dollars, the Indian rupee has slumped to record lows below 83 against the US greenback. India's current account deficit (CAD) jumped seven-fold to $9.2 billion in the April-June quarter compared to the corresponding figure of $1.3 billion in the preceding quarter, according to the latest RBI data released last week. The continuing surge in oil prices and slowing exports due to a decline in demand in global markets, which is expected to widen further, will bring the rupee under further pressure. CAD for April-June quarter of 2023-24 was 1.1 per cent of the GDP. According to Emkay Global Financial Services lead economist Madhavi Arora, the July-September quarter will see a "substantial widening of CAD" to 2.4 per cent of the GDP on account of higher oil prices, higher core imports and further slowing of services exports.

Rupee plunges to 12-month low against dollar

New Delhi, Nov 24 () India's gold imports, which have a bearing on the current account deficit (CAD), dipped 9 per cent to USD 17.63 billion (about Rs 1.25 lakh crore) during April-October period of the current fiscal, according to Commerce Ministry data.
 Imports of the yellow metal stood at USD 19.4 billion in the same period of 2018-19.
 Dip in gold imports has helped in narrowing the country's trade deficit to USD 94.72 billion during April-October period of 2019-20 as against USD 116.15 billion in the same period of previous fiscal.
 Gold imports had been recording a negative growth since July this year. However, it grew by about 5 per cent to USD 1.84 billion in October.
 India is the largest importer of gold, which mainly caters to the demand of the jewellery industry.
 In volume terms, the country imports 800-900 tonnes of gold annually.
 To mitigate the negative impact of gold imports on trade deficit and CAD, the government increased the import duty on gold to 12.5 per cent from 10 per cent in this year's Budget.
 According to industry experts, businesses in the sector are shifting their manufacturing bases to neighbouring countries due to high duty.
 The Gems and Jewellery Export Promotion Council (GJEPC) had asked for a cut in import duty to 4 per cent.
 Gems and jewellery exports declined by about 2 per cent to USD 18.3 billion in April-October this fiscal.
 The country's gold imports dipped about 3 per cent in value terms to USD 32.8 billion during 2018-19. RR RVK

Gold imports dip 9 pc during Apr-Oct

Mumbai, Mar 12 () The country's current account deficit (CAD) narrowed sharply to USD 1.4 billion, or 0.2 per cent of GDP, for the December 2019 quarter, the Reserve Bank of India (RBI) said on Thursday. The deficit had stood at 2.7 per cent in the corresponding quarter a year ago and 0.9 per cent in the previous quarter. The sharp contraction in the deficit was mainly due to a lower trade deficit of USD 34.6 billion, and a rise in net services receipts, the central bank said. The CAD, a critical indicator of the macroeconomic health, represents the gap between the overall foreign exchange expended and received in the economy. The release of the data, coming at a time when markets are spooked due to the coronavirus concerns, will help provide hope to investors. The foreign exchange market tracks the gap closely, and the release of the data comes on a day when the rupee depreciated to a 17-month low of 74.24 against the dollar. During the 'taper tantrum' episode of 2013, the CAD at record highs was one of the reasons for the rupee to be hammered. For the first nine months of the financial year, the CAD has narrowed to 1 per cent, the RBI said. During the December 2019 quarter, the trade deficit narrowed to USD 34.6 billion as against USD 49.3 billion for the same period a year ago, the RBI data said adding that the dip was largely driven by a correction in imports. The Indian economic growth may slow to a decadal low of 5 per cent for the financial year 2019-20, driven largely by consumption, which seems to have impacted the imports as well. On the services front, the net earnings increased to USD 21.9 billion, which was marginally higher as compared to the USD 21.7 billion in the year-ago period. The RBI said the receipts increased on the back of a rise in net earnings from computer, travel and financial services. In what can be seen as a surge in remittances by the diaspora, the private transfer receipts rose 9 per cent to USD 20.6 billion for the quarter, the RBI said. The net foreign direct investment was also higher at USD 10 billion in the December 2019 quarter, as against USD 7.3 billion in the year-ago period. Foreign portfolio investments recorded a net inflow of USD 7.8 billion as against an outflow of USD 2.1 billion last year on account of net purchases in both the debt and equity market, it said. The external commercial borrowings by Indian companies increased to USD 3.2 billion for the quarter, up from the USD 2 billion in the year-ago period, the RBI said. There was an accretion of USD 21.6 billion to the foreign exchange reserves on a balance of payment basis as against a depletion of USD 4.3 billion in the third quarter, the RBI said. AA HRS

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For every rupee depreciation, software exports increase by $250 mn: SBI Chief Economic Advisor

IANS

CAD Dips To 1.7% In Q1 As Trade Deficit Declines

BI India Bureau