Following a series of measures taken by the Government to curb the demand for the yellow metal which had impacted the current account deficit (CAD) in a negative manner, gold imports declined 11.8 per cent to $50 billion (around Rs. 2.7 lakh crore) in the April-February period of 2012-13.
Gold imports in terms of value stood at $56 billion for 2011-12, $40 billion in 2010-11 and $28 billion in 2009-10, Minister of State for Finance, Namo Narain Meena informed Lok Sabha on Friday.
“Gold imports at $50,637 million and 9,51,170 Kg in 2012-13 (April-February) were lower by 11.8 per cent and 1.6 per cent (in volume terms) over corresponding previous period,” Mr. Meena informed.
Government has taken a host of steps to curb the demand of precious metal and has hiked import duty to 6 per cent from 4 per cent earlier.
In order to channelise household savings to financial instruments, the government proposed to introduce inflation indexed bonds to protect savings from inflation. Gold is the second major import item for India after petroleum and constituted 11.3 per cent of total imports in 2011-12 in value terms. Gold imports account for nearly 26 per cent of India's trade deficit during April-February.
“The rise in imports of gold is one of the factors contributing to India's high trade deficit and CAD in 2011-12, forming 30 per cent of its trade deficit,” he said. Rising gold and oil imports have pushed up the CAD to a record high of 6.7 per cent in the October-December quarter. The recent decline in gold prices could lead to a fall in the value of gold imports for investment purposes.
Gold prices fell to a 21-month low of Rs. 26,440 per ten grams in the domestic markets on April 16 due to continued sell off in the global markets. Gold prices closed at around Rs. 28,000 per 10 grams in Delhi on Friday. It had touched an all-time high of Rs. 32,975 per 10 grams on November 27 last year.