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India's gold imports decline 5% to $26.93 billion during April-January

18 Feb 2019 Evaluate

India, one of the largest gold importers in the world, marked decline in gold imports during April- January 2018-19 by 5% to $26.93 billion, comparing to a same period of previous year's $28.23 billion imports, capping current account deficit. Softening prices of the precious metal in the world markets is stated as reason for the contraction in imports. In volume terms, the country's total gold imports increased by 22.43% to 955.16 tonnes in 2017-18. It stood at 780.14 tonnes in 2016-17.

Imports recorded three consecutive monthly declines; during October, November and December 2018, and then it grew by 38.16% to $2.31 billion in January this year. Meanwhile, gems and jewellery exports slipped 4% to $32.9 billion during the 10 months of the current fiscal.

India's current account deficit (CAD), or the difference between outflow and inflow of foreign exchange in the current account, widened to 2.9% of the GDP in the second quarter of the fiscal, against 1.1% in the year-ago period, mainly due to a large trade deficit.

The government of India had taken several measures to curtail gold imports, which includes restricting duty-free gold imports from South Korea as allowed under the India-Korea free trade agreement, and imposition of self-use condition on Premier Trading House/Star Trading House authorised to import the precious metal directly from overseas bullion suppliers. It had also imposed 10% import duty on gold.

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