As India is the largest importer of gold but Covid-19 outbreak affected the import of gold. During April-November of the current fiscal, gold imports fell by 40 per cent by 12.3 billion dollars.
The import of gold affects the country’s current account deficit. According to the Commerce of Ministry’s data for the year 2019-20, India imported gold worth 20.6 billion dollars last year which has now decreased by 40 per cent to 12.3 billion dollars.
The imports of silver have declined by 75.2 million dollars that is by 65.7 per cent between April and November. The country’s trade deficit widened to 42 billion dollars between April and November 2020-21 due to a fall in gold and silver imports. The trade deficit was 113.42 billion dollars a year ago.
In November, the country’s exports fell by 8.74 per cent, which is by 23.52 billion dollars. This led to a decline in exports of petroleum, engineering, chemicals and diamonds and jewellery. In the first eight months of this year, exports of the diamond and jewellery industry declined by 44 per cent that is 14.30 billion dollars. Imports also declined by 33.39 billion dollars that is 13.32 per cent. As a result, the trade deficit decreased to 9.87 billion dollars in November.
India imports 800 to 900 tonnes of gold a year
India is the world’s largest importer of gold. It mainly imports gold for the jewellery industry. Also, investing in gold is considered to be the safest investment in India. As a result, India imports 800 to 900 tonnes of gold every year.