India's gold and silver imports have declined by 34 per cent year-on-year to USD 2.9 billion on account of various steps taken by the government to curb their imports, especially the yellow metal.
The gold and silver imports in July 2012 were USD 4.4 billion. The imports were marginally up, however, compared to USD 2.45 billion in June, the lowest so far in 2013. The dip in imports has helped maintain the trade deficit at the June level.
The trade gap stood at USD 12.2 billion. But the unchanged trade deficit will still put pressure on the current account deficit and the fluctuating rupee. The data for July was released by Director General of Foreign Trade Anup Pujari.
Current Account Deficit (CAD) has been estimated at 4.8 per cent of the GDP in 2012-13, as against the RBI's comfort level of 2.5 per cent. High CAD puts pressure on the domestic currency and can expose the economy to balance of payments problems.
In the first five month of 2013, the gold and silver imports were USD 7.4 billion, USD 5.7 billion, USD 3.3 billion, USD 7.5 billion and USD 8.4 billion respectively. To curb demand, the government hiked the import duty on gold three times in a year and raised it recently by 2 per cent, to 8 per cent.
Besides, RBI too has put restrictions on banks on importing gold. India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Its imports stood at around 830 tonne in 2012-13.
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