Gold Imports In India More Than FDI and FPI

by GoNews Desk 2 years ago Views 9668

Indian Gold Imports More Than FDI Inflow
In a historic first, India has bought more gold this past year than the foreign direct investments (FDI ) or  investment in its stock markets by FPIs. India spent a record $55.7 billion on gold imports in 2021, buying more than double the previous year as a prices dropped and retail buyers lined up for the yellow metal. Another reason was pent-up demand from the year 2020 when weddings were delayed when the pandemic first hit. Comparatively FDIs were only $52.55b and Foreign Portfolio Investors brought in only $7.07B as net investments. 

The 2021 gold import bill easily doubled the $22 billion spent in 2020, and surpassed the previous high, set in 2011, of $53.9 billion, according to details published by the RBI. In volume, India imported 1,050 tonnes in 2021, the most in a decade, and far more than the 430 tonnes imported in 2020, the official said. Only China bought more gold than India in 2021 as their stock market was restricted by the government and people preferred to invest in gold.

This Gold Rush can impact India's trade deficit negatively as country's trade deficit has been more than $20b for the last three months of 2021. 

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