Gold Imports of 2019-20 dip by 8.86% narrowing Current Account Deficit to 143 billion USD
On March 16, 2020, the Commerce Ministry reported that the gold imports for the period April to February (2019-20) has reduced by 8.86% as compared to the previous year.
India is the largest importer of gold in the world. As the gold imports of the country have been reduced, the trade deficit has reduced to 143.12 billion USD. It was around 173 billion USD a year ago.
Gold imports of India has been declining since December 2019. On an average India imports 800 to 900 tonnes of gold annually.
What is the issue?
Indian economy has been facing increased current account deficit due to import of gold and fuel.
The Current Account Deficit is the difference between money flowing in on exports and the money flowing out on imports. A country with increasing CAD means that it is becoming uncompetitive. It also means that investors are not willing to invest.
Therefore, reducing gold and oil imports will reduce current account deficit.
Category: Economy & Banking Current Affairs