Mumbai: India’s gold imports rose to $4.17 bn in March, which is expected to widen the current account deficit.Gold imports stood at $974 mn in March last year. Imports of gold were on a decline since February 2016 until September 2016. It grew in October and November last year but again dipped in December 2016 and January 2017. In February, the inbound shipments grew to $3.48 bn from $1.4 bn in the same month the previous year.
The increase in gold imports in March widened the trade deficit to a four-month high of $10.4 bn as against $ 4.4 bn in March 2016. Silver imports, however, dipped by 3.19 percent to $204.2 mn in March.
According to rating agency ICRA, the imports surge was led by restocking, as well as marriage and festive season demand. India is the world’s second-biggest gold consumer after China. The imports mainly take care of demand from the jewellery industry.
In volume terms, India imported 560.32 tonnes of gold during the April-January period of the last fiscal. Gold import aggregated to 968.06 tonnes in the entire 2015-16 fiscal and 915.47 tonnes in 2014-15.
At present, gold import attracts 10 per cent duty. The gems and jewellery industry along with the Commerce Ministry have time and again urged the Finance Ministry to consider cut in the import duty. For the full year 2015-16, CAD stood at $22.1 billion, or 1.1 percent of GDP, as against $26.8 bn, or 1.3 percent, in 2014-15.