India's gold imports reached an all-time high of $14.8 billion in November, driven by increased demand for gold investments, tariff reductions, and trade agreement loopholes. The 2024-25 Budget's reduction in import duties has made gold more appealing, impacting trade balance, weakening the rupee, and increasing the current account deficit.
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Picture Courtesy: Indian Express
The Union government has launched a "detailed examination of gold import data" a day after official trade figures revealed that India's gold imports in November increased threefold to an all-time high of $14.8 billion compared to the previous year. The Directorate General of Commercial Intelligence and Statistics (DGCIS) started a thorough examination of gold import data.
Several factors have contributed to the rise in gold imports, including increased demand for gold investments, tariff reductions, and trade agreement loopholes.
The reduction of import duties from 15% to 6% in the Budget 2024-25, aimed at reducing gold imports from Dubai, has made gold more appealing due to the small price difference between domestic and global rates.
The sharp increase in gold imports has impacted the trade balance, weakened the rupee, and increased its current account deficit.
It is in charge of collecting, compiling, and communicating commercial data and trade statistics with policymakers, researchers, traders, and exporters.
Its roots can be found in a statistical division that was founded in 1862 under the Finance Department. The post was renamed the Director General of Statistics in 1871, and Sir William W. Hunter was appointed as the first Director General.
It is headed by the Director General, an Additional Secretary-level officer in the Indian Statistical Services.
It is administered within the Ministry of Commerce.
The headquarters is located in Kolkata.
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PRACTICE QUESTION Q.Consider the following statements: 1. When a country imports more than it exports, the value of its currency decreases. 2. Gold purchases by central banks have the potential to trigger inflation. Which of the above statements is/are correct? A) 1 only B) 2 only C) Both 1 and 2 D) Neither 1 nor 2 Answer: C Explanation: Statement 1 is correct: The value of a currency is closely related to the value of a country's imports and exports. When a country imports more than it exports, the value of its currency decreases. When a country exports more than it imports, the value of its currency rises. Statement 2 is correct: When central banks buy gold, it affects the supply and demand for the domestic currency, which may cause inflation. This is largely due to the fact that banks print more money to buy gold, resulting in an excess supply of fiat currency. |
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