India’s gold imports dropped by 24.15% in the fiscal year 2022-23, falling to $35.01 billion from $46.16 billion the previous year. This decline can be attributed to factors such as increased import duties, global uncertainties, and rising prices.
However, in March 2023, there was a significant increase in gold imports, rising by 216.75% to $3.3 billion from $1.04 billion in March 2022. While this rise can be partly attributed to a low base effect of imports a year ago, jewelry exporters believe that the demand for gold during the festival of Akshaya Tritiya may have also contributed to the increase.
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Import duty
“The Finance Ministry increased the import duty on gold to 15% from 10.75% on June 30, 2022. The objective was to reduce gold imports and address the widening current account deficit. Therefore, it is not surprising that gold imports have been declining since the second half of FY23,” said a source.
The high prices of gold, due to increased import duties and global uncertainties, also resulted in subdued demand for imports, according to Ajay Sahai, DG, Federation of Indian Export Organisations.
“As the prices of gold have significantly increased, people have also sold the gold they had in the domestic market, leading to less demand for imports,” he said.
Akshaya Tritiya
The sharp rise in imports last month could be mainly due to the increased domestic demand for gold jewelry during Akshaya Tritiya, said Vipul Shah, Chairman, Gems & Jewellery Export Promotion Council. “There is now a realization that the high price of gold will continue and may further increase in the future due to banking turmoil in the outside world,” he said.
