NEW DELHI: India's imports of gold, which affect the country's Current Account Deficit (CAD), increased 6.4 percent to USD 12.9 billion between April and July of this fiscal year as a result of strong demand, govt data showed. The imports were USD 12 billion over the same time period the previous year.
However, according to the latestdata from the Commerce Ministry, imports of the pricey metal plunged significantly in July 2022 by 43.6 percent to USD 2.4 billion.
A record trade deficit of USD 30 billion, compared to USD 10.63 billion from April through July of 2021, was caused by an increase in imports of gold and oil during the first four months of this fiscal year.
After China, India is the world's second-largest consumer of gold. The demand from the jewellery business is mostly met by imports. The first four months of the current fiscal year saw an increase in gem and jewellery exports of roughly 7 percent, reaching USD 13.5 billion.
According to Reserve Bank figures released in June, the country's current account deficit during 2021–22 increased to 1.2 percent of GDP from a surplus of 0.9 percent in FY21.
The CAD decreased sequentially from USD 22.2 billion or 2.6 percent of GDP in the October-December 2021 quarter to USD 13.4 billion or 1.5 percent of GDP for the January-March 2022 quarter.
When a country's exports of goods and services and other receipts during a given time are more than its imports of goods and services, there is a current account deficit.