After recording significant decline in September, gold and silver imports jumped by 62.5 per cent to $1.3 billion in October.
In September the imports fell by over 80 per cent year-on-year to $0.8 billion. However, it's a significant decline year-on-year, as India had registered imports at $6.8 billion in October 2012.
The inbound shipments grew mainly due to the festival season and clearing of air on a norm for gold imports. The Reserve Bank of India's (RBI) 80:20 scheme for gold imports had left many confused, leading to imports being held up at customs.
"Gold and silver imports in October was high due to the confusion over 80:20 issue," Commerce Secretary S R Rao said.
During the first seven months of this financial year, however, gold and silver imports declined by 12.86 per cent to $24 billion from $28 billion in the same period last year.
Increase in the gold and silver imports have
pushed the trade deficit to $10.5 billion in October, the second-lowest during the year but higher than $6.76 billion registered in September.
The trade gap is low as compared to October 2012 when it was $20.2 billion.
The
current account deficit (CAD) touched a historic high of 4.8 per cent of GDP in the last financial year, mainly attributed to high imports of gold and petroleum products. A high CAD puts pressure on the rupee, which has depreciated by about 15 per cent since April 30, exposing the economy to balance of payments problems.
In order to contain imports of the precious metals, the government had recently
hiked import duty on gold for the third time in a year and also banned imports of gold coins and medallions. Further, the RBI also restricted import of gold to a consignment basis by banks.
India is the largest importer of gold, which is mainly utilised to meet the
demand of the jewellery industry. Import of the precious metal stood at 845 tonnes in 2012-13.
With inputs from PTI
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