India's gold imports surged 677% in May

By

Isabelle Crossley

Published
Jun 7, 2022

India’s gold imports reached their highest level in a year and surged 677% year-on-year this May thanks to a correction in prices just before the festive and wedding season, traditional times to purchase gold.

Shoppers purchased large amounts of gold jewellery during the Akshaya Tritiya festival thanks to a reduction in what had been historically high gold prices, Business Standard reported. This contributed to a steep increase in gold imports, especially as the festival fell when people were also purchasing bridal jewellery for the summer wedding season, larger this year than in 2021 due to an end to Covid-19 restrictions on gatherings. 

This May, India imported a total of 101 tonnes of gold compared to 13 tonnes of gold in May 2021, an anonymous source told Reuters on June 6. The value of the gold imports last month was $5.83 billion, up from $678 million a year ago, according to the source. 

Although the increase in gold imports shows positive sentiment in the fine jewellery industry, the sudden surge in imports could increase India’s total trade deficit. This would put pressure on the rupee and could harm India’s position in the international market. The Union Government is working to reduce India’s trade deficit through programmes including its ‘Make in India’ initiative to boost domestic manufacturing but this is proving a challenge.