Gold Imports: Imports drop to just 30 tonnes; traders wary of importing gold following government curbs

Gold Import News: Gold imports have declined since the government sharply raised taxes on the commodity. Here are the details of the story.

Gold Import: Some time ago, when the public was grappling with inflation, the government hiked import duties on gold. This measure was taken to prevent the depletion of the country's foreign exchange reserves while the economy recovered. The move aimed to curb non-essential imports, and it appears to have succeeded, as gold imports into the country have indeed dropped.

Decline in Gold Imports

The impact of the hike in import duties on gold is now clearly visible. Government data confirms this trend. According to NDTV Profit, a government official stated that following the duty hike, gold imports have plummeted by approximately 70%, falling to just 25–30 tonnes. Previously, 75–100 tonnes of gold were imported monthly. The government raised import duties on gold and silver from 6% to 15% effective May 13, leading to a reduction in overseas gold purchases.

Imports Rise in Value Terms

However, in terms of value, India's gold imports rose by 34% year-on-year to $3.41 billion in May, driven by the surge in gold prices. Meanwhile, during the April–May period, gold imports increased by 60.14% to reach $9.04 billion. Looking at the previous financial year, India imported gold worth $71.98 billion. However, in terms of volume, imports declined by 4.76% to 721.03 tonnes. It is worth noting that inflation was rising across the country due to the conflict between Iran and the US. In light of this, Prime Minister Narendra Modi appealed to the public to reduce their gold purchases—or avoid buying it altogether unless necessary—for about a year. It was following this appeal that the import duty on gold was raised. The PM's statement had also sparked fears among the public that gold prices might skyrocket. However, that did not happen; gold prices did not see any significant fluctuation throughout that inflationary period.