After declining for seven months in a row, gold imports grew 65.13 per cent to $3.12 billion in June. Gold imports in June 2013 were $1.88 billion.
However, the import of silver in June dropped to $0.21 billion, compared with $0.62 billion during the same month last year. The import of gold rose $1.24 billion from June 2013 whereas silver imports dropped $0.41 billion.
The high gold imports have marginally pushed up the country’s trade deficit to $11.76 billion in June from $11.28 billion in the same month last year. In October 2013, gold imports had risen 62.5 per cent to $1.3 billion.
The government has imposed restrictions on inbound shipments of the precious metal to narrow the current account deficit (CAD). India’s CAD, the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of the gross domestic products (GDP) in 2012-13, mainly due to rising imports of petroleum products and gold.
A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation. The government had increased Customs duty on gold to 10 per cent and banned import of gold coins and medallions, while the Reserve Bank of India (RBI) linked imports of the metal to exports. India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry.
The commerce and industry ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports, which declined five per cent in June to $3.31 billion.
Experts say a decline in gold prices in the global market has pushed up imports in the country.