New Delhi: During the Coronavirus Crisis, millions of people lost their jobs in the country, and the employment of crores came to a standstill. This had a negative impact on the purchasing power of the people. Meanwhile, the common people facing challenges on the economic front also got disillusioned with the purchase of gold and the demand for precious yellow metal in the country was affected. The result of this was that during the April-November 2020 in the current financial year, gold imports in the country decreased by 40 percent to $ 12.3 billion. Explain that the import of gold has an effect on the current account deficit.
Silver imports fell to $ 75.2 million
According to the Commerce Ministry data, gold imports stood at $ 20.6 billion in the same period of FY 2019-20. However, in November 2020, gold imports grew by 2.65 percent to $ 3 billion on an annual basis. Silver imports also declined by 65.7 percent to $ 75.2 million during April-November 2020 in the current financial year. The trade deficit of the country was limited to $ 42 billion in April-November 2020 due to the fall in gold-silver imports. It was $ 113.42 billion in the same period a year ago.
44% fall in gems and jewelry exports
India is the largest importer of gold. Gold is imported mainly to meet the demand of the jewelry industry in the country. Gold imports range from 800 to 900 tonnes annually depending on the quantity. In the first eight months of the current financial year, gems and jewelry exports dropped by 44 percent to $ 14.30 billion. The country’s exports declined by 8.74 percent to $ 23.52 billion in November. At the same time, imports also fell by 13.32 percent to $ 33.39 billion. This reduced the trade deficit to $ 9.87 billion. Total exports have also come down due to the decline in exports of sectors like petroleum, engineering, chemical and gems, and jewelry.
