The Commerce Ministry in its latest data has showed that gold imports, which have a bearing on the current account deficit (CAD), plunged 94% to $688 million (about Rs 5,160 crore) during the first quarter of 2020-21 (Q1FY21), as compared to imports of the yellow metal of $11.5 billion (about Rs 86,250 crore) in the corresponding period of 2019-20. The decline was due to a significant fall in demand in the wake of the COVID-19 pandemic.
Similarly, silver imports during the quarter too dipped 45% to $575 million (about Rs 4,300 crore). The decline in gold and silver imports has helped in narrowing the country's trade deficit, difference between imports and exports, to $9.12 billion during April-June 2020-21 against $45.96 billion in the year-ago period.
Gold imports have been recording a negative growth since December last year. The fall in March, April, May and June was to the tune of 62.6%, 99.93%, 98.4% and 77.5%, respectively. India is the largest importer of gold, which mainly caters to demand of jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually. Gems and jewellery exports declined by about 72% to $2.7 billion in April-June 2020.
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