According to data from the Commerce Ministry, the gold imports increased to around USD 24 billion during April-September 2021 due to the rise in gold demand in India. Gold imports have a bearing on the current account deficit, and they stood at USD 6.8 billion in the corresponding period last year.
Gold, Silver and Gems, and Jewellery Imports
The gold imports during September 2021 rose to USD 5.11 billion against USD 601.4 million in September 2020. Gems and jewellery exports increased to USD 19.3 billion during April-September of the current fiscal against USD 8.7 billion in the corresponding period of the previous year.
Silver imports dipped by 15.5% to USD 619.3 million during April-September 2021. However, silver imports increased to USD 552.33 million during September 2021 against USD 9.23 million in September 2020.
A significant increase in gold imports led to a widening of the country’s trade deficit. The difference between imports and exports of gold stood at USD 22.6 billion during September 2021 against USD 2.96 billion in the year-ago period.
A significant jump in the gold imports has led to a record widening of the country’s trade deficit, the difference between imports and exports, to USD 22.6 billion during September this fiscal as against USD 2.96 billion in the year-ago period.
Take on Increase in Gold Imports
India is the largest importer of gold, and it mainly caters to the demand of the jewellery industry. India imports 800-900 tonnes of gold annually in terms of volume. The Gems and Jewellery Export Promotion Council of India (GJEPC) chairman, Colin Shah, stated that the increase in gold imports is due to the festive season and demand in the country.
The Federation of Indian Export Organisations (FIEO) director-general Ajay Sahai stated that the demand for gold primarily pushed gold imports in India. He said that people are spending less on marriages due to the COVID-19 pandemic, which has led to savings. The savings are going into gold buying, and people sceptical about the third wave are investing in gold.
The people who are gaining from stock markets are also diversifying their investment portfolio into gold. The increase in gold imports has widened the trade deficit. There is a significant increase in gold demand, leading to a rise in gold imports in India. More people are opting for gold investments in India.
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