India's gold and silver imports from its free trade agreement (FTA) partner UAE have skyrocketed 210 per cent to $10.7 billion in 2023-24 and there is a need to potentially revise the concessional customs duty rates under the pact to mitigate the arbitrage driving this surge, a report said on Monday. Economic think tank Global Trade Research Initiative (GTRI) said this sharp rise in gold and silver imports is primarily driven by import duty concessions granted by India to the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA).
Jewellers are also focusing on designs to attract customers.
Besides, a higher opening in the domestic equity market and strengthening of the euro against the dollar overseas supported the local currency, forex dealers said.
It's the beginning of a rate reduction cycle
The sharp and sudden fall in the exchange rate of the Indian currency in relation to the American greenback has taken many by surprise.
He also suggested reducing interest rates would help stimulate growth.
India's exports contracted 12.2 per cent to $34.48 billion in December 2022, mainly due to global headwinds, and the trade deficit widened to $23.76 billion during the same period, according to official data released on Monday. Imports in December 2022 also declined 3.5 per cent to $58.24 billion as against $60.33 billion in the year-ago period. In December 2021, exports stood at $39.27 billion and the trade deficit was at $21.06 billion.
.jpg)
The basis of Ind-Ra's expectation of INR appreciation is based on economic developments in the last one to two months of this fiscal and the likely developments in the remaining months.
India's external debt rose by almost 13 per cent to $390 billion in 2012-13, mainly due to an increase in short-term trade credit and external commercial borrowings amid a high current account deficit.
The current account deficit, which is the difference between inflow and outflow of foreign exchange, rose to a record high of 4.8 per cent of GDP in 2012-13, from 2.8 per cent in 2010-11.
The Union government's fiscal deficit works out to be Rs 5.47 lakh crore or 36.3 per cent of the budget estimates at the end of October 2021 on the back of improvement in revenue collection, according to the data released by the Controller General of Accounts (CGA) on Tuesday. The deficit figures in the current fiscal appear better than the previous financial year when the gap between expenditure and revenue had soared to 119.7 per cent of the last year's Budget Estimates (BE) mainly on account of a jump in expenditure to deal with the COVID-19 pandemic. In absolute terms, the fiscal deficit was Rs 5,47,026 crore at the end of October, the CGA said.
Coming to the oil situation, the developments in Iraq are worrying because the outcomes are completely unpredictable at this point.
Finance Minister P Chidambaram on Monday said the currency will find its level as steps being taken by the government to contain fiscal and current account deficits will improve investor sentiments.
Due to a spike in crude oil prices and the govt's high fiscal deficit
Interview with Asia-Pacific economist, Morgan Stanley
Global risk aversion and India's widening current account deficit have dragged the rupee close to all-time low.
'Rhetoric and chest-thumping are running high on India's recent growth record.'
'But will the giant waves developing elsewhere allow us to sail smoothly into fair winds?' asks Debashis Basu.
Expressing serious concerns over the current account deficit touching a record 4.8 per cent in 2012-13, India Inc on Thursday asked the government to take all policy measures, including boosting exports and foreign exchange inflows to bring down CAD.
Positive for banking, infra, FMCG and real estate.
Chidambaram said he expected gold imports to touch $40 billion in the current fiscal year to end-March, down 31 percent from the year-ago bill of $58 billion.
Exports in January 2014 stood at $26.89 billion.
India's current account deficit narrowed sharply to just $300 million
The current account deficit is the difference between inflow and outflow of foreign exchange.
Imports of gold and silver in February 2013 stood at $5.24 billion. In January this year, they were $1.72 billion.
Mumbai, May 14 (PTI) The massive spike in trade deficit caused by sharp rise in gold imports in April would not sustain and there is no need to get excessively worried over the data, analysts have said. They also said the current account deficit or the difference between the foreign exchan ...
The government and the Reserve Bank had also imposed certain other restrictions on its shipments, including linking of imports to exports to prevent outgo of the foreign exchange.
She has shown shrewdness, sensitivity, and courage. All of these will be needed in ample quantities for the real challenge that will emerge after the elections, notes Shreekant Sambrani.
The eight years and more since 2004-05 have seen a continuous non-oil trade deficit, the first such period since the 1980s.
However, copious oil supplies amid growing global output and slowing Chinese oil consumption will put India in a better bargaining position with Gulf suppliers.
India is projected to see moderate average annual growth of 5.9 per cent during the 2014-18 period amid the country witnessing macroeconomic weaknesses, according to Paris-based think tank OECD.
Gold and silver imports declined 80.55 per cent to $1.05 billion in November after a slew of measures taken by the government to curb inbound shipments of the metal, aimed at narrowing the current account deficit.
The Finance Ministry on Wednesday described the sharp fall in the value of the rupee as a reflection of "irrational sentiment" and said there is no need for panic.
India's trade account could come under pressure and there could be an inflation push if crude oil prices remain above the $90 per barrel (Brent) for a prolonged period since India imports over 85 per cent of its oil and roughly 50 per cent of its gas. A rebound in economic activity is bound to lead to higher fuel demand. While India is the third-largest importer of crude, it is a net exporter of refined products, which helps to compensate to some degree.
The Reserve Bank has told the International Monetary Fund (IMF) that the objective of frequent interventions in the forex market is to curb excessive volatility, dismissing the Fund's rationale for reclassifying India's exchange rate regime. The IMF, following the Article IV consultation with the Indian authorities, reclassified the status of the exchange rate regime to "stabilised arrangement" from "floating" for period between December 2022 to October 2023. India's Executive Director at IMF K V Subramanian and Senior Advisors Sanjay Kumar Hansda and Anand Singh questioned the selection period adopted by the Fund for analysis and also reclassification of the country's exchange rate regime.
A govt report on Wednesday recommended reining in gold imports to curb deficit.
The rupee's slide was predictable in direction, if not in timing. It has been obvious for months that India was vulnerable to depreciation. A combination of European weakness and bearish FII attitudes were the triggers.
India's exports have fallen since last year as demand slowed from major sales destinations, adding to the country's economic gloom and heightening worries about its trade and current account deficits.
Two major events, the general elections and the impact of US tapering, will dictate the direction of the Indian markets.
It forecasts better growth on the back of stronger external demands and progress on reforms.
India's fiscal deficit is projected to more than double to 6 per cent of GDP this fiscal against the budgetary target of 2.5 per cent. For the next fiscal, the deficit is estimated to be 5.5 per cent of GDP.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances