India's Gold and Silver imports plunged nearly 70% in February

11 Mar 2014 Last updated at 08:22:45 GMT

NEW DELHI (Scrap Monster): The inbound shipments of gold and silver dropped significantly in India, thanks to the the strict regulations on gold imports by the Union government and the Reserve Bank of India (RBI) which limited the gold import bill during the initial three quarters of the current fiscal to under $21 billion. The gold and silver imports by India fell sharply to USD 1.63 billion in February, declining sharply by nearly 70% year-on-year.

The imports of gold and silver during the same month a year before totaled USD 5.24 billion. The country’s imports during the month of January had totaled $1.72 billion. The imports continued to maintain a declining trend in February, dropping by over 5% over the prior month.

The country’s cumulative imports of gold and silver during the eleven-month period of the current fiscal from April 2013 to February 2014 totaled USD 30.7 billion. This is 42% lower when compared with the imports of USD 52.4 billion during the corresponding eleven-month period the previous fiscal.

The Current Account Deficit (CAD) had risen to USD 88.2 billion or 4.8% of the GDP in FY ’13. The huge drop in gold and silver imports by the country is expected to bring down the CAD by 50% to nearly USD 40 billion in FY ’14. Despite repeated demands from various corners, the government has so far been reluctant to relax the high duty structure and other import curbs on gold.

Also, lower gold and silver imports have helped to narrow the country’s trade deficit to USD 8.13 billion in February.

Author: Paul Ploumis