India's gold imports surge 30% to $45.54 billion in 2023-24

India's gold imports, which have a bearing on the country's current account deficit (CAD), surged by 30% to USD 45.54 billion during 2023-24 due to strong domestic demand, according to government data. The imports stood at USD 35 billion in 2022-23.

In March this year, however, the imports of the precious metal contracted by 53.56% to USD 1.53 billion, as per the data released by the commerce ministry. Switzerland is the largest source of gold imports, with about 40% share, followed by UAE (over 16%) and South Africa (about 10%).

The precious metal accounts for over 5% of the country's total imports. At present, there is a 15% import duty on gold. Despite the increase in gold imports, the country's trade deficit (difference between imports and exports) narrowed to USD 240.18 billion in the last fiscal as against USD 265 billion in 2022-23.

India is the world's second-biggest gold consumer after China. The imports mainly take care of the demand by the jewellery industry. The gems and jewellery exports in 2023-24 dipped by about 14% to USD 32.7 billion.

India's current account deficit narrowed to USD 10.5 billion or 1.2% of GDP in the October-December quarter as against USD 11.4 billion or 1.3% in the preceding three months ending September, according to RBI data released on March 26.

During April-December 2023-24, CAD has moderated to 1.2% of GDP from 2.6% of GDP in the corresponding period a year ago on the back of a lower merchandise trade deficit. 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. As per the ministry data, silver imports increased by 2.72 per cent to USD 5.4 billion in 2023-24.