{"id":29647,"date":"2024-09-18T19:23:51","date_gmt":"2024-09-18T13:53:51","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=29647"},"modified":"2025-04-18T12:31:18","modified_gmt":"2025-04-18T07:01:18","slug":"indias-gold-imports-have-doubled","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/18-09-2024\/indias-gold-imports-have-doubled","title":{"rendered":"India\u2019s Gold Imports Have Doubled"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Gold imports more than doubled<\/strong> in August to a record high of USD 10.06 billion, according to the Commerce Ministry data.\n<ul class=\"wp-block-list\">\n<li>It is mainly on account of a <strong>drastic cut in customs duty and ongoing festive demand.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Gold Import of India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Gold accounts for <strong>over 5 percent <\/strong>of the country\u2019s total imports.&nbsp;<\/li>\n\n\n\n<li>India is the<strong> world\u2019s second-biggest<\/strong> gold consumer after China.&nbsp;<\/li>\n\n\n\n<li>The imports mainly take care of the <strong>demand by the jewellery industry.<\/strong><\/li>\n\n\n\n<li><strong>Switzerland is the largest source of gold imports,<\/strong> with about 40 percent share, followed by the UAE (over 16 percent) and South Africa (about 10 percent).<\/li>\n\n\n\n<li>India\u2019s gold imports, which have a bearing on the country\u2019s current account deficit (CAD), dipped by 4.23 percent during April-July 2024-25.\n<ul class=\"wp-block-list\">\n<li>In the Budget 2024, the government slashed the import duty from <strong>15 percent to 6 percent.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Factors Influencing Gold prices:<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Supply and Demand:<\/strong> The availability of gold and the demand for it, both for investment and industrial use, directly impact prices.\n<ul class=\"wp-block-list\">\n<li>Increased mining output can lower prices, while high demand can raise them.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Inflation:<\/strong> Gold is often seen as a hedge against inflation. When inflation rises, investors flock to gold to preserve their purchasing power, driving up prices.<\/li>\n\n\n\n<li><strong>Geopolitical Stability:<\/strong> Political uncertainty or conflict lead investors to seek safety in gold, boosting demand and prices.<\/li>\n\n\n\n<li><strong>Currency Strength:<\/strong> Gold is typically priced in U.S. dollars. A weaker dollar makes gold cheaper for holders of other currencies, potentially increasing demand and prices.<\/li>\n\n\n\n<li><strong>Central Bank Policies:<\/strong> Actions by central banks, such as gold purchases or sales, significantly influence market prices. Central banks often hold gold as part of their reserves.<\/li>\n\n\n\n<li><strong>Global Economic Conditions:<\/strong> Economic downturns or uncertainties lead to increased demand for gold as a safe haven.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Impact of high Gold Imports<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Trade Balance:<\/strong> Increased gold imports worsen a country&#8217;s trade balance, leading to a larger trade deficit if exports do not compensate. This can put pressure on the national currency.<\/li>\n\n\n\n<li><strong>Currency Value:<\/strong> A high level of gold imports can lead to depreciation of the domestic currency, as demand for foreign currency rises to pay for imports.<\/li>\n\n\n\n<li><strong>Inflation:<\/strong> If gold is being imported as a hedge against inflation, its rising demand can contribute to inflationary pressures in the economy.<\/li>\n\n\n\n<li><strong>Resource Allocation:<\/strong> Large gold imports might divert financial resources from other sectors, impacting overall economic growth.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Gems and Jewellery Industry in India<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In April-June 2024, India&#8217;s gems and jewellery exports were at <strong>US$ 6.87 billion.&nbsp;<\/strong><\/li>\n\n\n\n<li><strong>Cut and polished diamonds <\/strong>accounted for the highest share of exports (53.47%), followed by gold jewellery (32.39%) and silver jewellery (3.36%).<\/li>\n\n\n\n<li><strong>The exports of gold jewellery <\/strong>stood at US$ 608.01 million whereas the imports of gold jewellery stood at US$ 88.61 million in June 2024.<\/li>\n\n\n\n<li><strong>Major Hubs for Gems and Jewellery are: <\/strong>Surat, Mumbai, Jaipur, Thrichor Nellore, Delhi, Hyderabad and Kolkata.&nbsp;<\/li>\n\n\n\n<li>India\u2019s gems &amp; jewellery exports are expected to<strong> reach US$ 100 billion by 2027.<\/strong><\/li>\n\n\n\n<li>Based on its potential for growth and value addition, the Government declared the<strong> gems and jewellery sector as a focus area for export promotion.<\/strong><\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/business\/gold-imports-doubled-record-high-august-9572857\/\" target=\"_blank\" rel=\"noopener\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold imports more than doubled in August to a record high of USD 10.06 billion, according to the Commerce Ministry data.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-29647","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/29647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=29647"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/29647\/revisions"}],"predecessor-version":[{"id":41473,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/29647\/revisions\/41473"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=29647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=29647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=29647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}