India's gold imports dipped 24.15% to $35 billion in the financial year 2022-23 as compared to $46.2 billion in FY2021-22 amid a global slowdown, especially in developed economies, the commerce ministry data shows. The yellow metal import value stood at $3.3 billion in March 2023 as compared to $1 billion in the year-ago period. Silver imports, however, surged 6.12% to $5.29 billion in the year-ago period.

Experts have cited high import duty for the dip in imports of gold. India, being the largest importer of gold, had hiked gold import duty to 15% from 10.75% in order to correct the current account deficit (CAD) in 2015.

According to the World Gold Council (WGC) data, demand for gold in India saw a 17% fall in the first quarter of 2023 to 112.5 tonnes compared to the 135.5 tonnes demand in the first quarter of 2022, mainly due to high prices of the yellow metal and market volatility. However, gold demand in value terms was down only by 9%, to ₹56,220 crore for Q1 2023, compared to ₹61,540 crore in the corresponding quarter of last year.

Currently, gold prices in India are hovering around a record ₹60,000 for 10 grammes when compared to ₹52,000 during the last year.

Total jewellery demand in India for Q1 2023 decreased by 17% to 78 tonnes as compared to 94.2 tonnes in Q1 2022. Valuewise, jewellery demand was ₹39,000 crore, down by 9% from ₹42,800 crore in Q1 2022.

However, India's overall gem & jewellery exports, despite multiple business challenges across the globe, increased by 2.48% in FY 2022-23 to ₹3,00,462.52 crore ($37468.66 million) as compared previous year's exports of ₹293193.19 crore ($39,331.71 million). Big growth was seen in segments like polished lab diamonds, gold jewellery, plain gold jewellery, coloured gemstones and silver during the year, says data released by the Gem and Jewellery Export Promotion Council (GJEPC).

India’s major export markets are the USA, Hong Kong and UAE and the implementation of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) by the Ministry of Commerce & Industry was the main reason for the 17% growth in exports of plain gold jewellery in 2022-23.

The World Gold Council’s latest Gold Demand Trends report reveals that while gold demand (excluding OTC) was 13% lower year-on-year, a recovery in the OTC market propped up total gold demand to 1,174t, a slight 1% increase compared to Q1 2022. "Continued momentum in central bank buying and resurgent Chinese consumer demand contrasted with a negative contribution from ETFs and weakness in India," WGC says painting a mixed picture for gold demand in Q1.

In its outlook for 2023, the WGC says it continues to see a healthy upside for investment in 2023, while the picture for fabrication (jewellery and technology) is more "muted". "Further robust central bank buying is expected, albeit below 2022’s record. Modest growth is likely in both mine production and recycling," it adds.

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