India, the world’s largest buyer of Gold has reduced its imports for the metal by 80.6% to 31.55 tons in June, 2013. There are still slight chances of increase in the imports in the upcoming months due to the fall in its price. The estimated fall in import of gold by the All India Gems and Jewellery Trade Federation (GJF) was around 24% to about 38 tons in June. In the month of June, 2012, the total imports of the country were about 50 tons.
The estimated Current Account Deficit (CAD) of the country is around 5% of the GDP for FY 13. In October-December quarter the CAD had touched a record of 6.7% which was the highest record made by it. According to the Central Bank of India the trade deficit during April-May has widened owing to the sudden increase in festival or seasonal gold imports. Thus to restrain the demand, the government had increased the import duty on gold three times in the year and raised it to 8% which was earlier 2%. Also the Reserve Bank of India had put restrictions on the banks on import of gold.
The GJF has also taken steps to help the government in restraining the gold imports by issuing a circular to its members to stop them from selling gold bars and coins. “We have requested our members and affiliated members to help the government to reduce gold import by not selling bars and coins. We are getting positive response from our members and this step will help bringing down the imports to some extent,” said, Haresh Soni, Chairman of GJF. They have also submitted a representation to the finance minister suggesting ways to restrain imports in the country without harming the jewellery industry, he further said.