“The reduction of import tariffs from 15% to 6% in the last Budget, aimed at checking gold imports from Dubai, has further incentivised imports,” says Ajay Srivastava of GTRI.
After reduction in import duty in July 2024, gold imports kept increasing month-on-month. In August, gold imports more than trebled to $10 billion from $3.1 billion in July.
After a fall in September (to $4.4 billion) due to Pitru Paksh, the growth in gold imports resumed with $7.1 billion in October and $14.9 billion in November.
But there are other reasons as well for the country’s gold imports bill to surge. Crisil believes high global prices have added to India’s gold import bill. International gold prices of rose from $2,300 an ounce level in July 2024 to 2,700 levels in the first half of November. The prices on average hovered around $2,650 in November.
Ajay Srivastava of Global Trade Research Centre (GTRI)says the India-UAE Comprehensive Economic Partnership Agreement (CEPA), effective since May 1, 2022, has also contributed to the surge.
According to him, CEPA allows unlimited duty-free imports of gold, silver, platinum, and diamonds into India over the coming years. India’s imports of gold and silver from the United Arab Emirates have surged by 210 percent, reaching $10.7 billion in 2023-24.
