Gold imports fell by about 51% to $2.7 billion in April-May this fiscal, which is expected to keep a lid on the current account deficit (CAD).

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The sliding prices of the precious metal in both global and domestic markets are seen as a contributory factor for the plunge.

Gold imports stood at $5.55 billion in April-May 2015.

The in-bound shipments contracted for the fourth consecutive month in May by 39.14% at $1.47 billion, according to Commerce Ministry data.

The contraction in the imports helped narrow trade deficit to $6.27 billion last month. The deficit was at $10.4 billion in the year-ago period.

India is the largest importer of gold in the world and the imports mainly take care of demand of the jewellery industry.

India's CAD narrowed to 1.3% of gross domestic product (GDP) in the third quarter (Q3) of 2015-16 as against 1.5 in the same period of the previous year, mainly on account of a lower trade deficit.