Gold imports dip in Aug on govt, RBI measures.

MUMBAI: The government and the RBI's push to contain gold imports by raising import duty on the yellow metal and other related measures are showing results with a decline in imports of this precious metal. The significant drop in import of gold, along with weak import trend for capital and consumption goods mainly because of subdued domestic demand, has the potential to help lower growth in non-oil imports during this year, economists said.

"The most satisfactory news is that impact of measures taken by RBI and government to contain gold imports is showing their results. Gold import declined to 2.5 tonnes (or $650 million) in August 2013 from 47.5 tonnes (or $2970 million) in July," an update on the economy by SBI noted. "In fiscal 2014 so far (April-August), India has imported 384 tonnes of gold (worth $21.9 billion) as compared to 950 tonnes (or $53.8 billion) in fiscal 2013 (full year)," the report pointed out.

According to the SBI report, if the gold imports decline further and reaches the fiscal 2011 level of $40 billion, then current account deficit may be around 3.8% of GDP in FY14 as against 4.8% of GDP in FY13.

A similar economy update from Crisil noted that a significant decline in gold imports and weak capital and consumption goods' imports, due to subdued domestic demand, will help lower growth in non-oil imports during this year.

Source : timesofindia.indiatimes.com