India’s gold imports plunged 24.15 per cent in 2022-23 to $35.01 billion from $46.16 billion the previous fiscal as factors such as increase in import duties, global uncertainties and rising prices took a toll.

In March, however, gold imports posted a steep rise of 216.75 per cent to $3.3 billion from $1.04 billion in March 2022. While the rise is partly due to a base effect of low imports a year ago, jewellery exporters say that Akshaya Tritiya demand for gold may have also contributed to the rise.

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Import duty

“The Finance Ministry increased the import duty on gold to 15 per cent from 10.75 per cent on June 30, 2022. The objective was to lower gold imports to check the widening current account deficit. So, it is no surprise that since the second half of FY23 gold imports have been falling,” said a source.

High gold prices — due to increase import duties and global uncertainties — also resulted in subdued demand for imports, said Ajay Sahai, DG, Federation of Indian Export Organisations.

“Because prices of gold have gone up substantially, people also offloaded gold available with them in the domestic market, leading to less demand for imports,” he said.

Akshaya Tritiya

The sharp rise in imports last month could broadly be because of the rise in domestic demand for gold jewellery due to Akshaya Tritiya, said Vipul Shah, Chairman, Gems & Jewellery Export Promotion Council. “Realisation is now seeping in that the high price of gold will hold and may go further northward in coming times with banking turmoil in the outside world,” he said.

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