New Delhi: Gold imports declined 26.39 per cent to $1.81 billion in July due to restrictions imposed by the government on inbound shipments of the precious metal to narrow the current account deficit.
Imports of gold stood at $2.46 billion in July 2013.
However, in June, gold imports were up by 65.13 per cent at $3.12 billion.
After registering double digit growth in May and June, the country's exports expanded by 7.33 per cent in July.
Current account deficit, which is the excess of foreign exchange outflows over inflows, touched a historic high of $88 billion, or 4.7 per cent of GDP, in 2012-13, mainly due to rising imports of gold and petroleum products.
In order to check the rising current account deficit, the government raised import duty on the yellow metal to 10 per cent, while the Reserve Bank of India (RBI) imposed curbs on import of gold and also laid down various pre-conditions for inward shipments of the precious metal.
Current account deficit came down to $32.4 billion, or 1.7 per cent of GDP, in 2013-14.
In May, the RBI had eased gold import norms by allowing select trading houses in addition to already permitted banks to procure the precious metal to boost exports.
A high current account deficit puts pressure on the rupee which in turn makes imports expensive and fuels inflation.
India is the largest importer of gold, which is mainly utilised to meet the demands of the jewellery industry.
The Commerce and Industry Ministry is pitching for easing of gold import restrictions to boost gems and jewellery exports, which declined 17.42 per cent in July to $2.87 billion.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
