Lack of goods in the wake of declining gold imports

Mumbai, Ta. 19 October 2020, Monday

Gold imports, which affect the country's current account deficit, declined by 9 per cent year-on-year to ૮ 2.50 billion (approximately Rs 206 crore) in the first six months of the current financial year. Imports have remained low due to declining demand due to corona, Commerce Ministry sources said.

Gold imports are expected to fall sharply during the coming festive season, which could lead to increased demand for old gold for recycling. However, it remains to be seen what the market price will be, market sources said.

In the first six months of last financial year, the country's gold imports stood at ૫ 16.50 billion (approximately Rs 1,10,8 crore). During the April-September period of the current year, silver imports declined by 2.50 per cent year-on-year to 2.8 crore (approximately Rs 3 crore).

Significant decline in gold and silver imports has helped keep the country's fiscal deficit low. India is a major importer of gold due to the widespread demand of the country's jewelery industry. The lockdown imposed by Corona also affected India's foreign trade.

In addition, higher gold prices globally are also attributed to the decline in imports.

India's annual gold imports are 40 to 300 tonnes. During the April-September period, exports of gems and jewelery declined by 3 per cent to ૮ 2.50 billion, Commerce Ministry sources said.

Traders are expecting a shortage of goods during this year's festive season, given the sharp fall in gold imports.