Gold imports rise to US $3.85 billion

Recording a three-fold jump, India's gold imports rose to US $3.85 billion in April, mainly on account of Akshaya Tritiya.

Gold imports stood at US $1.23 billion in April last year, as per official data released on Tuesday.

Imports of the precious metal were on a decline between February and September last year. They grew in October and November but again dipped in December and January. In February and March, they recorded high growth rates. In March this year, gold imports had risen to US $4.17 billion from US $974 million in the same month previous year.

Surge in gold imports in April contributed to the widening of trade deficit to US $13.2 billion as against US $4.84 billion in April 2016. Silver imports too grew by 61% to US $353 million in April.

India is the world's second biggest gold consumer after China. The imports mainly take care of demand by the jewellery industry. In volume terms, India imported 560.32 tonnes of gold during April-January period of the last fiscal.

At present, gold import attracts 10% duty. The gems and jewellery industry along with the commerce ministry have time and again urged the Finance Ministry to consider a cut in the import duty. During April to December period of last fiscal ended March 31, the current account deficit halved to 0.7%, from 1.4% a year ago.

The surge in gold imports in April is on account of low base effect and the increase in demand due to Akshaya Tritiya, which fell on April 28. ICRA Ltd said that the surge in imports was led by restocking, as well as festive season demand. "The volume of gold imports is likely to taper off in the coming months," it said.