SEATTLE (Scrap Monster): The massive jump in domestic gold purchases in India has resulted in boosted gold imports, thus eventually widening the country’s trade deficit in the month of November this year.
During the first eight months (Apr-Nov ’21) of the current fiscal year, the country’s trade deficit expanded to $122 million. The jump in deficit was mainly fuelled by the imports of gold during the period. Incidentally, the gold import bill surged over 170% when compared with the corresponding eight month period in 2020.
In the previous fiscal, Indians were confined to their houses, on account of multiple prolonged breakouts of the Covid-19 pandemic. The spending on non-essential goods witnessed significant decline as a result of lockdown restrictions and economic downturn. This led to enormous jump in gold import bills during this fiscal on a year-on-year basis, as a low-base impact.
The share of gold import bills in the total import bills increased to its highest level since 2015-’16. The data provided by the Ministry of Commerce indicates that gold imports by value of the total imports in Apr-Nov ’21 rose to 8.6%, as against the average of 6.3-7.7% in recent years.
As per estimates, the gold imports by the country totalled around 445 tonnes from April to September this year.