Gold, silver imports more than double to $61.5 bn in four years

Imports of gold and silver have soared to $61.5 billion in 2011-12, from $22.8 billion in 2008-09, the government said on Tuesday.

"The value of imports of gold and silver was $22.8 billion in 2008-09, $29.6 billion in 2009-10, $42.5 billion in 2010-11 and $61.5 billion in 2011-12," Minister of State for Finance Namo Narain Meena said in a written reply to the Rajya Sabha.

According to the World Gold Council, India is the largest consumer of gold in the world followed by China, he added.

"As far as gold and silver are concerned, India is a net importer and the prices of these precious metals depend on international prices. The volatility in the prices of gold and silver in India is mainly due to the volatility in the prices of these commodities in the international markets," he said.

The current account deficit (CAD), which arises when import of goods and services exceeds export, had touched 4 per cent at the end of December 2011. It was 3.3 per cent during the same period of previous year.

The increase in CAD was mainly on account of higher imports of petroleum products and gold and silver.

In a separate reply, Meena said to lower the impact of gold import on CAD, the government in Budget for 2012-13 has proposed to increase basic customs duty on standard gold bars, gold coins of purity exceeding 99.5 per cent and platinum from 2 per cent to 4 per cent.

Besides, customs duty on non-standard gold was increased to 10 per cent from 5 per cent.

He said the Reserve Bank of India (RBI) has taken certain prudential measures in respect of non-banking financial companies (NBFCs) which are engaged in lending against gold jewellery to restrict loans against gold.