Recording nearly three-fold rise, India’s gold imports increased to USD 4.95 billion in May. According to the Reserve Bank, the precious metal’s imports saw a surge initially on account of seasonal and festival demand but subsequently due to stockpiling in anticipation of the the goods and services tax (GST) rollout.
Gold imports stood at USD 1.47 billion in May last year, as per official data released today. Surge in the imports last month contributed to the widening of trade deficit to a 30-month high of USD 13.84 billion as against USD 6.27 billion in May 2016. Silver imports too jumped to USD 442.9 million in May from USD 39.54 million in the same month last year.
India is the world’s second biggest gold consumer after China. The imports mainly take care of demand by the jewellery industry. At present, gold import attracts 10 per cent duty. The gems and jewellery industry along with the commerce ministry has time and again urged the finance ministry to consider a cut in the import duty.
High imports of the precious metal could impact the CAD numbers. The current account deficit (CAD) soared to USD 3.4 billion, or 0.6 per cent of gross domestic product (GDP), in the fourth quarter of fiscal 2017, from USD 0.3 billion a year ago.