India’s Gold rush slows down

Mumbai-India (May 28)  Weak demand has shrunk the gold import bill, investors seem to prefer investment options other than the yellow metal.

 When India faced a run on the Rupee and a widening trade deficit in 2013, its annual gold import bill had topped $50 billion for the second year running. Between FY10 and FY13, India saw consistently high demand for gold jewellery, bars and coins despite galloping global gold prices.

 This bloated the country’s gold import bill from about $28 billion in FY10 to a record $56 billion in FY12.

 But gold imports have since seen substantial moderation from those excessive levels. In FY18, India’s dollar outgo on gold imports amounted to just $34 billion, having shrunk 40 per cent from the peak six years ago.

 Gold imports have hovered in a narrow range of $27 billion to $35 billion for five years now. Bullion accounted for nearly 12 per cent of the country’s import bill in FY12. But its contribution is now down to about 7 per cent.

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