Domestic demand drives India’s gold imports

India is the world’s second-biggest gold consumer after China

• Pramod Thomas
• 31 October, 2024

Follow Us

By: Pramod Thomas

INDIA’s gold imports, which have a bearing on the country’s current account deficit (CAD), rose by 21.78 per cent to $27 billion (£21.6bn) during April-September this fiscal due to strong domestic demand, according to the government data.

The imports stood at $22.25bn (£17.8bn) in April-September 2023-24.

A current account deficit occurs when the value of goods and services imported and other payments exceeds the value of the export of goods and services and other receipts by a country in a particular period.

An industry expert said that the ongoing festival demand is helping the increase in imports.

In 2023-24, India’s gold imports surged 30 per cent to $45.54bn (£36.43bn).

Switzerland is the largest importer of gold, with about 40 per cent share, followed by the UAE (over 16 per cent) and South Africa (about 10 per cent).

The precious metal accounts for over 5 per cent of the country’s total imports.

The jump in gold imports pushed the country’s trade deficit (difference between imports and exports) to $137.44bn (£109.95bn)  during the first half of the current fiscal compared to $119.24bn (£95.39bn)  during April-September 2023.

India is the world’s second-biggest gold consumer after China. The imports mainly take care of the demand by the jewellery industry. These shipments declined by 10.89 per cent to $13.91bn (£11.13bn) during April-September 2024-25.

India’s CAD widened marginally to $9.7bn (£7.76bn) or 1.1 per cent of GDP in April-June 2024 against $8.9bn (£7.12bn) or 1 per cent in the year-ago period.

Silver imports soared 376.41 per cent to $2.3bn (£1.84bn) during the first half of this fiscal from $480.65 million (£384.52m) in April-September 2023-24, the data showed.

In the Budget, the government slashed the customs duty from 15 per cent to 6 per cent.

(PTI)