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Even ten years ago, the ‘gem and jewellery' sector was a net importer. But, like the total trade deficit, the outflow on this count was small. Both deficits have gone through the roof since then.
While the trade deficit went from $6 billion to $120 billion over the past ten years (and is expected to cross $150 billion this year), the ‘glitter deficit', too, went up about 20-fold.
Gold was a key driver. At $40 billion, gold imports last year accounted for 34 per cent of the trade deficit. To put it in perspective, net FII flows, even at their all-time high, were just $29 billion.
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