India's Gold Imports Surge 28.73% to $69 Billion, Impacting Trade Balance
India's gold imports experienced a significant increase of 28.73%, reaching $69 billion during the period from April to February in the fiscal year 2025-26. This substantial rise is primarily attributed to the elevated prices of the precious metal, as reported by Commerce Ministry data cited by PTI. In comparison, gold imports stood at $53.52 billion during the same timeframe in the previous fiscal year, 2024-25.
Trade Deficit Widens Amid Rising Gold Imports
The sharp escalation in gold imports has contributed to a notable widening of India's trade deficit. The trade deficit increased to $310.60 billion over the 11-month period of the last fiscal year, up from $261.80 billion recorded a year earlier. This expansion underscores the significant impact of gold imports on the country's overall trade balance.
Currently, gold prices are hovering around Rs 1,51,500 per 10 grams in the national capital, inclusive of all taxes. This high price point has been a key driver behind the increased import value, even as demand remains robust.
Switzerland Leads as Top Gold Supplier to India
Switzerland maintained its position as the largest source of gold imports for India, accounting for approximately 40% of the total share. Following Switzerland, the United Arab Emirates contributed over 16%, while South Africa supplied about 10% of India's gold imports during this period.
Imports from Switzerland specifically rose by 11.57% to $23.5 billion during April-February 2025-26. In a remarkable surge, imports from Switzerland in February alone skyrocketed by 719.30% year-on-year, reaching $2.71 billion.
Gold's Role in India's Economy and Current Account Deficit
Gold accounts for more than 5% of India's total imports, highlighting its substantial role in the nation's import basket. India holds the title of the world's second-largest gold consumer, trailing only China. The demand for gold is largely driven by the jewellery sector, which caters to both domestic consumption and export markets.
These substantial gold inflows have direct implications for India's current account deficit (CAD). According to Reserve Bank of India (RBI) data, the CAD rose to $13.2 billion, or 1.3% of GDP, in the December quarter. This marks an increase from $11.3 billion, which represented 1.1% of GDP, recorded a year ago. The primary factor behind this rise is the higher trade deficit.
However, for the period spanning April to December 2025, the CAD moderated to $30.1 billion, equivalent to 1% of GDP. This is a decrease compared to $36.6 billion, or 1.3% of GDP, in the same period of the previous year, indicating some improvement in the broader economic balance.
Silver Imports Also See Dramatic Increase
In addition to gold, silver imports during April-February witnessed a dramatic jump of 142.87%, reaching $11.43 billion. Silver is extensively utilized across various industries, including electronics, automobiles, and pharmaceuticals, which explains the heightened import activity.
Government Imposes Restrictions to Curb Imports
In response to the soaring imports of precious metals, the government took decisive action last week by imposing restrictions on all forms of gold, silver, and platinum articles. This move aims to curb the outflow of foreign exchange and address the widening trade deficit, reflecting policy measures to stabilize the economy.
