New Delhi, Jul 16 (PTI) After declining for seven months in a row, gold imports grew by 65.13 per cent to USD 3.12 billion in June. Imports of gold in June 2013 were USD 1.88 billion. The high imports have marginally pushed up the country's trade deficit to USD 11.76 billion in June from USD 11.28 billion in the same month last year. In October 2013, gold imports had risen 62.5 per cent to USD 1.3 billion.
The government has imposed restrictions on inbound shipments of the precious metal to narrow the Current Account Deficit. India's CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of GDP in 2012-13, mainly due to rising imports of petroleum products and gold. A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation. The government had increased customs duty on gold to 10 per cent and banned import of gold coins and medallions, while the RBI linked imports of the metal to exports. India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry.
The Commerce and Industry Ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports, which declined by 5 per cent in June to USD 3.31 billion. According to experts, decline in gold prices in the global market have pushed up imports in the country. Gold in New York, which normally sets price trend on the domestic front, fell by 0.7 per cent to USD 1,297.10 an ounce after touching USD 1,292.60, the lowest since June 19.