India has marked decline in imports of gold by around 5.5% in value terms to $29.5 billion during April-February 2018-19, comparing to last year same period's $31.2 billion. Weaker international prices have contributed for the contraction of imports. Besides, the country's total gold imports had increased by 22.43% to 955.16 tonnes in 2017-18. It stood at 780.14 tonnes in 2016-17.
Gems and jewelry exports dipped 6.3% to $28.5 billion during the 11 months of FY19. India's current account deficit (CAD) widened to 2.9% in Q2FY19, against 1.1% in a year ago period, mainly due to a widening trade deficit. The domestic jewelry industry always demands a cut in the duty and relaxation of norms for increasing availability of the yellow metal to boost jewelry exports.
The government has introduced several measures to restrict the import of gold, including 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 authorized to import the precious metal directly from overseas bullion suppliers. It has also imposed 10% import duty on gold.