After recording a sharp rise in August, gold imports dipped 45.62% to $2.05 billion in September, a development that will help check the country’s Current Account Deficit (CAD).
The sliding prices of the yellow metal is one of the reasons for the plunge in imports. The prices are declining in both global and domestic markets.
The gold imports stood at $3.78 billion in September 2014.
This year, the imports of the yellow metal were up 62.2% and 140% in July and August, respectively.
The contraction in imports helped in narrowing the trade deficit to $10.47 billion in September.
India is the largest importer of gold in the world. The imports mainly cater to the demand of jewellery industry.
However, in the recent past, large imports of the precious metal have also widened the CAD, which occurs when value of import of goods and services is more than exports.
In 2014-15, gold was the third largest commodity imported in India after crude oil and electronic items. During that fiscal, the country’s imports stood at $34.32 billion.
The CAD in 2014-15 shrank to 1.3% of GDP ($27.5 billion) from 1.7% ($32.4 billion) in 2013-14.
Globally, gold prices declined 0.2% to $1,138.35 an ounce on September 2 in Singapore. The prices were hovering around $1,260 an ounce in the first week of September last year.
Falling for the third straight day, gold prices were down by Rs 10 to Rs 26,820 per ten grams at the bullion market on October 31. It was Rs 28,175 per ten grams on September 1 last year in the domestic market.