Gold imports more than doubled to $4.95 billion in August, driven by dip in global prices and higher domestic demand in view of forthcoming festival season.
In August 2014, imports stood at $2.06 billion. Higher imports will have adverse bearing on India's current account deficit (CAD).
The growth in gold imports has pushed the country's trade deficit to $12.47 billion in August. India is the largest importer of gold in the world, which mainly caters to the demand of the jewellery industry. labour intensive gems and jewellery exports in August grew by 2.66 per cent to $3.35 billion.
Current account deficit happens when value of import of goods and services is more than that of exports. The CAD in 2014-15 shrank to 1.3 per cent of GDP ($27.5 billion) from 1.7 per cent ($32.4 billion) in 2013-14.