Gold imports fall 37% to $1.96 bn in June

Gold imports fell by almost 37 per cent to $1.96 billion in June, a development which will help in keeping the current account deficit (CAD) in check.

Imports of the precious metal stood at $3.12 billion in the same month of 2014. In May this year, the imports were worth $2.42 billion. The decline in gold imports helped in narrowing the trade deficit to $10.82 billion in June as against $11.76 billion in the same month last year.

India is the largest importer of gold, which mainly caters to the demand of the jewellery industry.

However, large imports of gold has also widened the current account deficit, which occurs when value of import of goods and services is more than exports, in recent past. The CAD in 2014-15 shrank to 1.3 per cent of GDP ($27.5 billion) from 1.7 per cent ($32.4 billion) in 2013-14. The Reserve Bank and the government have maintained that the CAD level is comfortable.