Gold bars are displayed at a gold jewellery shop. File
| Photo Credit: Reuters

After registering negative growth, the country’s gold imports, which impact Current Account Deficit (CAD), imports jumped by 192.13% to $4.47 billion in March, on account of significant increase in the prices of the yellow metal according to Commerce Ministry data.

Gold imports stood at $1.53 billion in January 2024.

Cumulatively, during the April-March 2024-25 fiscal year, the inbound shipments rose 27.27% to $58 billion against $45.54 billion in 2023-24.

The increase in imports also indicates strong investor confidence in the precious metal as a safe asset. The other reasons include asset diversification towards gold due to global uncertainties, increasing demand from banks, and jump in prices.

On April 17, the gold prices rose by ₹70 to hit yet another record high of ₹98,170 per 10 grams in the national capital. The prices soared to record highs due a weaker dollar, escalating trade war tensions, and growing concerns over global economic growth following US President Donald Trump’s tariff announcements.

However, silver prices plunged by ₹1,400 to ₹98,000 per kg. The white metal had settled at ₹99,400 per kg in the previous market close.

Silver imports in March contracted by 85.4% to $119.3 million. It was down 11.24% year-on-year in the 2024-25 fiscal year to $4.82 billion.

Switzerland is the largest source of gold imports, with about 40%, followed by the UAE (over 16%) and South Africa (about 10%).

The precious metal accounts for 8% of the country’s total imports.

In volume terms, the imports dipped to 757.15 tonnes in 2024-25 against 795.32 tonnes in 2023-24.

The gold imports in February were down by about 62%, while it rose by 40.8% in January and 55.39% in December 2024. The jump in gold imports pushed the country’s trade deficit (difference between imports and exports) to $21.54 in March. It touched an all-time high of $282.82 billion in the last fiscal.

India is the world’s second-biggest gold consumer after China. The imports mainly take care of the demand by the jewellery industry.

Gems and jewellery exports during the month rose by 10.62% year-on-year to about $3 billion. It was however dipped by 8.84% to $29.82 billion in 2024-25 from $32.7 billion in 2023-24.

India’s CAD inched up to $11.5 billion, or 1.1% of Gross Domestic Product (GDP), in the December quarter from $10.4 billion (1.1% of GDP) in the year-ago period, mainly due to higher trade deficit. It widened to $37.0 billion (1.3% of GDP) during April-December 2024 from $30.6 billion (1.1% of GDP) during the corresponding period of last year.