Gold imports fall over 80% in June

Gold imports have plunged by over 80% in June as government measures including a hike in customs duty tapered demand.

Gold imports in June are said to have fallen to around 31 tonnes, down from 162 tonnes in May and 141 tonnes in April, a source with direct knowledge of the development said.

The figures could, however, not be confirmed independently.

Sources said there has been a sharp fall in the import of gold to 31 tonnes as demand moderated and the impact of hike in duty was seen as traders bought less gold.

To curb demand, the government hiked the import duty on gold three times in a year and raised it recently by 2%, to 8%. Besides, RBI too has put restrictions on banks on importing gold.

India is the largest importer of gold and is mainly utilised to meet demand of the jewellery industry. The imports stood at around 830 tonne in 2012-13.

In value terms, gold and silver imports are estimated to have declined substantially to $2-2.5 billion in June, from $8.39 billion in May.

During the first two months of the current fiscal, April- May, inward shipments grew 109% to $15.88 billion in value terms.

High imports strain the Current Account Deficit (CAD), which hit a record high of 4.8% in the 2012-13 fiscal. Trade deficit in May was $20.1 billion, highest in the last seven months.

CAD occurs when total imports of goods, services and transfers is greater than the exports.