India’s Gold Imports Surge to $22.70 Billion Amid Festive Season Demand
New Delhi, India – Gold imports in India surged to USD 22.70 billion during the April-August 2024 period, up from USD 18.14 billion in the same period last year. This increase is driven by higher demand from the central bank, jewellers preparing for the festive season, and a reduction in customs duty announced in the union budget.
The spike in imports reflects the growing appetite for gold in India as consumers prepare for the festive and wedding season, traditionally peak times for gold purchases. However, India’s export of gems and jewellery declined to USD 11.10 billion in April-August 2024, compared to USD 12.43 billion during the same period in 2023. This dip comes even as domestic demand for jewellery remains strong.
The jewellery market in India has seen notable shifts in buying trends in 2024. A recent report by Nuvama highlights that while affluent buyers dominated jewellery purchases in the first quarter of the year, the second quarter saw an increase in demand for lower-priced jewellery items, particularly from semi-urban and rural markets. This shift has broadened the customer base and contributed to sustained growth in the overall jewellery market.
As the country gears up for the festive season, retailers have been expanding their store networks to cater to the growing demand. The Nuvama report predicts a potential 18 per cent increase in volume demand for jewellery in the second half of 2024, offering a positive outlook for the sector.
Gold imports, a key indicator of the jewellery sector’s health, have been on the rise. In July and August 2024, gold imports were 11 per cent higher than in the same period last year, showing a strong recovery in demand. The recent reduction in basic customs duty on gold, announced in the July Union Budget, has further boosted the domestic gold market, ending a five-month period during which gold was trading at a discount due to excess inventory and weak demand.
The recent surge in gold prices, currently 30 per cent higher than the average levels recorded in the second half of 2023, is not deterring demand. This price rise is further fuelled by continued gold buying by central banks, which has driven both price and volume growth in the market. The July-August period shows a positive sign of growth, and with the peak wedding season approaching, the demand for jewellery is likely to rise further.
The World Gold Council (WGC) has projected that gold demand in India for the calendar year 2024 will reach 850 tonnes, marking a 12 per cent year-on-year growth. The combination of a strong festive season, increased central bank buying, and reduced customs duties is expected to bolster the domestic gold and jewellery markets in the coming months.
Doubts Revealed
Gold Imports -: Gold imports mean buying gold from other countries. India buys a lot of gold for making jewellery and for people to invest in.
USD 22.70 billion -: USD 22.70 billion is a way to say 22.70 billion US dollars. It’s a lot of money, showing how much gold India bought.
Festive Season -: The festive season in India includes celebrations like Diwali and Dussehra. People often buy gold during these times for gifts and rituals.
Central Bank -: The central bank in India is the Reserve Bank of India (RBI). It helps manage the country’s money and sometimes buys gold to keep as a reserve.
Customs Duty -: Customs duty is a tax on goods coming into a country. If this tax is reduced, it becomes cheaper to import things like gold.
Gem and Jewellery Exports -: Gem and jewellery exports mean selling jewellery and precious stones to other countries. This helps India earn money from other countries.
Semi-urban and Rural Areas -: Semi-urban areas are places that are not fully cities but not villages either. Rural areas are villages or countryside where people live.
World Gold Council -: The World Gold Council is an organization that helps understand and promote the use of gold. They give information about gold demand and supply.
Tonnes -: Tonnes are a way to measure weight. One tonne is equal to 1,000 kilograms. So, 850 tonnes is a very large amount of gold.
