India’s gold imports have declined for the third consecutive month, reflecting a 4.23% decrease in the first four months of the current financial year (April-July 2024).
Gold imports fell to USD 12.64 billion during this period, compared to USD 13.2 billion in the same period last year.
The decline was more pronounced in July, with imports dropping by 10.65% to USD 3.13 billion, compared to USD 3.5 billion in July 2023.
Factors Behind the Decline
The decrease in gold imports is attributed to global economic uncertainties and high gold prices, according to industry experts.
However, a jeweler noted that the start of the festive season in September is expected to boost gold imports.
Additionally, the recent reduction in import duty on gold and silver from 15% to 6% is likely to have a positive impact on future imports.
Impact on Trade and Current Account Deficit
Gold imports play a significant role in influencing India’s current account deficit (CAD).
Despite the decrease in gold imports, the country’s trade deficit has widened, reaching USD 23.5 billion in July and USD 85.58 billion during the first four months of FY 2024.
Gold Prices and Market Dynamics
Amid rising gold prices in the international market, the price of gold in Delhi-NCR increased by INR 300 to INR 73,150 per 10 grams on August 14.
In contrast to the current decline, India’s gold imports surged by 30% in the full fiscal year 2024, reaching USD 45.54 billion.
Major Sources of Gold Imports
Switzerland remains the largest source of India’s gold imports, accounting for nearly 40% of the total, followed by the UAE (over 16%) and South Africa (about 10%).
Gold represents more than 5% of India’s total imports, highlighting its importance to the country’s economy.
