Gold imports witnessed a fall of about 32 per cent to $17.7 billion in April-December of the current fiscal, which is expected to keep a lid on the current account deficit.

Total imports in the corresponding period of 2015-16 stood at $26.4 billion.

According to industry experts, softening prices of the precious metal at the domestic and world markets could be the reason for the same. Cash crunch in the system due to demonetisation also impacted the inbound shipments.

According to Commerce Ministry data, gold imports dipped by 48.49 per cent to $1.96 billion in December.

Inward shipments had witnessed a fall during February-September this fiscal. It had recorded positive growth in October and November.

Contraction in imports helped in narrowing the trade deficit to about $76.54 billion during April-December period against $100 billion in the same period previous year.

India is one of the largest gold importers in the world, and the imports mainly take care of demand from the jewellery industry.

For the 2015-16 fiscal, CAD stood at $22.1 billion or 1.1 per cent of GDP against $26.8 billion or 1.3 per cent in 2014-15.

In volume terms, the country’s total official gold imports declined to 60 tonnes in April-July this fiscal, much lower than 250 tonnes in the year-ago period. India had imported 650 tonnes of gold in 2015-16.

Imports remained stable at around 100 tonnes in November despite fall in jewellery sales due to the cash crunch following demonetisation.

According to experts, rural demand is affected due to the currency shortage after the restriction on withdrawal of Rs 500 and Rs 1,000 notes announced on November 8.

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