Mumbai: Gold imports into India fell by 14.23% in value terms during FY2019-20 to US$ 28.2 billion, news agency PTI reported, quoting statistics released by the Ministry of Commerce.
During FY2018-19, the country’s imports of the yellow metal stood at US$32.91 billion, the report added.
Growth in gold imports turned negative during the last four months of the fiscal, PTI said. This coincides with the steady rise in the price of the yellow metal due to the uncertain political and economic situation worldwide. The last couple of months of 2019 were impacted by the US-China trade wars. Just as the tensions on that front seemed to be subsiding, the novel coronavirus pandemic began. The first to be hit was China, but as the health crisis spread across the world the global economy has been brought to a virtual standstill.
Gold prices which were at US$ 1,450 per oz levels have climbed steadily since then and are now hovering between US$ 1,650 and the US$ 1,710 mark in a rally that has largely been driven by demand from investors seeking a safe haven.
Jewellery demand, which was already low for a variety of reasons, has been further hit by the lockdown in India, which has brought the retail trade in all items, barring essentials, to a total halt. The extension of the lockdown till May 3 will mean that customers will be unable to make purchases at stores on Akshaya Tritiya, traditionally the second most important day for the purchase of gold in India. Shopping for the wedding season has also been hit and with celebrations likely to be muted, or drastically scaled down, jewellery demand too will possibly be affected.
Against this background, analysts and experts expect that imports of gold will decline even further during the current year. N Anantha Padmanaban, chairman of the All India Gem and Jewellery Council (GJC) was quoted by agency Reuters as saying that demand in 2020 could dip to levels last seen in the early 1990s.
In this context, the Confederation of Indian Industry (CII) said it has written to the government, recommending measures, including setting up a fund for artisans, reducing import duty on gold to 2%, a complete waiver of interest on loans and allowing e-commerce for jewellery, among other things to help the industry tide over the current crisis.