NEW DELHI(BullionStreet): Contrary to recent trends, India’s gold and silver imports climbed last fiscal to $61.5 billion from $22.8 billion two fiscals earlier.
According to official figures, value of imports of gold and silver was $22.8 billion in 2008-09, $ 29.6 billion in 2009-10, $42.5 billion in 2010-11 and $61.5 billion in 2011-12.
Giving a written reply in India’s upper house of Parliament, Minister of State for Finance Namo Narain Meena said India is a net importer of gold and silver and the prices of these precious metals depend on international prices. The volatility in the prices of gold and silver in India is mainly due to the volatility in the prices of these commodities in the international markets.
The current account deficit (CAD), which arises when import of goods and services exceeds export, had touched 4 per cent at the end of December 2011. It was 3.3 per cent during the same period of previous year.
The increase in CAD was mainly on account of higher imports of petroleum products and gold and silver.
In a separate reply, Meena said to lower the impact of gold import on CAD, the government in Budget for 2012-13 has proposed to increase basic customs duty on standard gold bars, gold coins of purity exceeding 99.5 per cent and platinum from 2 per cent to 4 per cent.
Besides, customs duty on non-standard gold was increased to 10 per cent from 5 per cent.
India’s gold imports slowed to 200 tonnes in the first quarter of calendar year 2012. Similar to global trends, the contraction was led by investment demand while jewellery demand contracted 19% during the same period.
In addition to portfolio shifts, this could be a result of the government’s recent focus on curbing gold demand (steps include raising import duties on gold from 2% of the value to 4% and restraining loans against gold collateral). All these measures, coupled with sharp depreciation in the rupee, have resulted in lower imports.
As per the World Gold Council, India is the largest consumer of gold in the world followed by China.
Categories: News mix