Gold imports to come down sharply to $38 bn in FY14: Rangarajan

Says latest numbers for July and August indicate a sharp decline in the import of gold

India's gold imports are likely to come down to $38 billion from $53.8 billion this fiscal despite some demand pick up during the forthcoming festival season, Prime Minister's key economic advisor C Rangarajan said today.

The latest numbers for July and August indicate a sharp decline in the import of gold, the Chairman of Prime Minister's Economic Advisory Council (PMEAC) said.

However, the low import trend may reverse a little in the coming months because of festival season, he said.

"We do expect gold import to come down substantially during this year... With the present regulations...Gold imports may come down to the level we have indicated that is $38 billion," he said.

The gold import, which totalled $53.8 billion in the last fiscal, is one of the major reasons for India's record high current account deficit (CAD) of $88.2 billion in 2012-13.

A concerned government raised customs duty on gold to 10% and the RBI put in import restrictions on banks and other agencies in this regard to tackle the situation.

Rangarajan further said India really needed to ensure that the declining trend in gold import is maintained in the future as well.

The PMEAC has projected gold and silver imports at $40 billion this fiscal as against $55.8 billion shipped in last fiscal.

In April 2013, world gold prices fell sharply and the domestic demand for gold sky-rocketed, with imports nearly topping $16 billion (including silver) in first two months of the fiscal. But since then the imports have slowed.