By Paul Ploumis 17 Jun 2015 Last updated at 08:35:47 GMT
NEW DELHI (Scrap Monster): The sharp drop in Indian gold imports during the month of May this year has dragged the country’s trade deficit to three-month low. The overall imports by the country recorded substantial drop during the month. The trade data released by the Indian Ministry of Commerce and Industry indicates that exports dropped as well.
The gold imports by the country during May totaled $2.42 billion, significantly lower when compared with the previous months this fiscal. The country’s gold imports during March and April this year had totaled $4.98 billion and $3.13 billion respectively. However, gold imports were marginally higher when compared with $2.19 billion in May 2014. It must be noted that gold imports had recorded almost 100% jump year-on-year in March this year. Also, April gold imports had surged higher by 78.3% from the previous year.
The Ministry data indicates that non-gold and non-oil imports by the country dropped for the first time in almost a year. The overall imports declined sharply by 16.5%, raising doubts about meaningful pick up in domestic economic activity. On the other hand, exports dropped heavily by 20.2% over the previous year. Exports of gems and jewellery declined during the month. The weakness in exports of engineering and electronic goods too continued.
The country’s trade deficit had narrowed to one-year low of 0.2% of GDP during Q1 2015. This is when compared with the deficit of 1.3% of GDP during the previous fiscal year. Also, the country’s trade deficit has declined to $10.41 billion in May from $10.99 in April. This is the lowest level since February.
India’s gold imports had jumped almost 20% higher during the last fiscal, mainly on account of increased demand growth owing to sharp fall in gold prices. The relaxation of gold import curbs also led to rise in inward shipments.
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