Gold Rush: India's Soaring Imports Impact CAD

India's gold imports rose 21.78% to USD 27 billion amid strong demand, affecting the current account deficit (CAD). As the world's second-biggest gold consumer, imports are driven by the jewellery industry. Meanwhile, silver imports surged 376.41%. This hike elevates the trade deficit to USD 137.44 billion.

India's gold imports have surged by 21.78% to a staggering USD 27 billion, driven by robust domestic demand, as revealed by recent government data. This significant increase is posing concerns over the country's current account deficit (CAD), widening it amid the festival season demand.

The fiscal data highlights that in 2023-24, the nation's gold imports rose 30%, reaching USD 45.54 billion. This increase was further fueled by a surge in demand from the jewellery industry, a major consumer in India, the world's second-largest gold market after China.

This rise in imports has subsequently increased India's trade deficit to USD 137.44 billion for the first half of this fiscal year. Additionally, silver imports skyrocketed by 376.41% to USD 2.3 billion. The customs duty on imports was reduced from 15% to 6% as per the Budget announcements.

(With inputs from agencies.)