value of gold
India is among the largest gold consumer countries in the world. The demand for gold in the country is so high that people buy gold worth about Rs 2,200 crore every day. According to the report of the World Gold Council (WGC), on an average 2.2 tonnes or about 2,200 kg of gold is purchased in India every day. In India, gold is not only a means of investment but is also associated with tradition and social prestige. Buying gold on weddings, festivals and special occasions is considered auspicious. This is the reason why about 800 to 900 tonnes of gold is consumed every year in the country.
About 75 percent of the total gold purchased in the country is used in the form of jewellery. Apart from this, people also invest in gold coins and gold bars. The states of South India, especially Kerala and Tamil Nadu, are considered to be at the forefront in the purchase of gold. Traditionally the demand for gold is very high here.
Most of the gold is procured from here
Domestic production of gold in India is very low. In such a situation, the country has to import about 99 percent of its gold requirement from abroad. India imports maximum gold from Switzerland. Its share in total imports is about 40 percent. After this comes the United Arab Emirates (UAE), from where about 16 percent of the gold reaches India. South Africa and Peru are also among the major gold supplier countries to India.
Recently, in view of the increasing import bill and pressure on foreign exchange reserves, Prime Minister Narendra Modi has appealed to the people to reduce the purchase of non-essential gold. The government believes that excessive gold import increases the country’s trade deficit. Meanwhile, the government has increased the import duty on gold and silver from 6 percent to 15 percent. After this decision, there was a rise in gold prices in the domestic market. Experts say that higher duty may reduce imports, but due to the strong demand for gold in India, its purchase is not going to stop completely.
Also read- Another big step of the government on gold, will there be any benefit from increasing the import duty?
