InvestorQ : Why are gold imports falling in India? Is it linked to the slowdown in consumption?
Neelam Naik made post

Why are gold imports falling in India? Is it linked to the slowdown in consumption?

Answer
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Priyanka N answered.
7 months ago


This fall in demand is partially due to weak demand and partly due to high gold prices. In fact, according to data put out by the Ministry of Commerce, gold imports for the 10 months period Apr-Jan 2020 fell 9% to $24.64 billion. This has narrowed the current account deficit by nearly $30 billion in the comparable 10-month period.

Gold imports started falling after the sensitive Indian market reacted to a sharp spike in gold prices. Gold crossed $1500/oz in the global market while Indian gold prices touched life-time highs of Rs.42,000/10 grams. Indian imports are normally a source of worry for the RBI as it depletes the foreign exchange reserves without any productivity. That has resulted in a fall in gold imported.