Gold imports, which have a bearing on the current account deficit (CAD), plunged 94 per cent to USD 688 million (about Rs 5,160 crore) during the first quarter of 2020-21 due to a significant fall in demand in the wake of the COVID-19 pandemic, according to data from the Commerce Ministry.
Imports of the yellow metal stood at USD 11.5 billion (about Rs 86,250 crore) in the corresponding period of 2019-20.
Similarly, silver imports during the quarter too dipped 45 per cent to USD 575 million (about Rs 4,300 crore).
The decline in gold and silver imports has helped in narrowing the country's trade deficit, difference between imports and exports, to USD 9.12 billion during April-June 2020-21 against USD 45.96 billion in the year-ago period.
Due to narrowing of trade deficit, India recorded a current account surplus of USD 0.6 billion or 0.1 per cent of GDP for January-March quarter against a deficit of USD 4.6 billion or 0.7 per cent of GDP in the year-ago period, the Reserve Bank of India has said.
Gold imports have been recording a negative growth since December last year. The fall in March, April, May and June was to the tune of 62.6 per cent, 99.93 per cent, 98.4 per cent and 77.5 per cent, respectively.
India is the largest importer of gold, which mainly caters to demand of jewellery industry. In volume terms, the country imports 800-900 tonnes of gold annually. Gems and jewellery exports declined by about 72 per cent to USD 2.7 billion in April-June 2020.