MUMBAI (Commodity Online): Indian gold import bill could rise 3 times to $100 billion by 2015-2016, as per a latest report by the Associated Chambers of Commerce and Industry India (ASSOCHAM). India imported close to $33.8 billion worth of gold in 2010-2011.
The report went on to add that such huge imports are a burden to the country's balance of payments and will result in further inflating the current account deficit. Since 2001-02, the import bill India has multiplied almost 8 times, the report states.
As such, the report advises the Indian government to encourage the development of various other financial instruments so as to reduce the strain on the country's current account. "India's gold imports are unsustainable and the government should encourage channelising savings in formal financial instruments to increase productive capacity of the economy”, the report said.
On the huge gold demand seen in India and China, the report notes that “India’s gold demand is ironically 37.6 per cent more than China’s although China’s GDP is 3.5 times of India’s GDP. Compared with the United States which has a 14 trillion dollar economy – ten times the size of Indian economy – India’s gold demand is almost five times”
