India’s gold imports have more than halved this financial year so far, thanks to the pandemic that obstructed its inward shipping and put a brake on the rising current account deficit.
On the flip side, the gems and jewellery exports are feared to drop by about 25% in this financial years.
Data released by Commerce Ministry showed gold imports have dropped 57% to $6.8 billion during April-September period. Last year, in the same period, gold imports stood at $15.8 billion.
Similarly, silver imports during April-September 2020 too dipped 63.4% to $733.57 million, the data showed.
The decline in gold and silver imports has helped in narrowing the country's trade deficit, the difference between imports and exports, at $23.44 billion during April-September 2020-21 as against $88.92 billion in the year-ago period.
But, India, the largest importer of gold, which mainly caters to the demand of the jewellery industry, is likely to suffer.
According to the Gem and Jewellery Export Promotion Council of India (GJEPC), the gems and jewellery export is expected to decline by 20-25% in the current financial year compared to 2019-20.
Gems and jewellery exports declined by about 55% to $8.7 billion in April-September 2020 amid the pandemic.
“We expect the exports to witness a decline of 20 25% in 2020-21, compared with last year. With demand improving gradually, we should be at our 2019-20 levels next year. Growth will come back only maybe by 2021-22,” according to GJEPC chairman Colin Shah.
India imports close to 900 tonnes of gold every year.