Kotak Warns of 90 Billion Dollar Gold Import Bill

India's gold import bill is projected to reach 88 to 90 billion dollars in fiscal year 2027. Uday Kotak issued this warning during a conference in New Delhi. He cited rising crude oil prices and sustained household demand as key drivers. The current account deficit could expand to approximately 60 billion dollars under these conditions.

Kotak noted that India recorded a current account surplus in fiscal year 2026 when gold imports were excluded. Gold imports stood at 72 billion dollars in that period. The overall current account deficit was around 25 billion dollars. This data highlights the outsized impact of precious metals on the trade balance.

Import Values Hit Record Highs

Gold import values rose more than 24 percent in fiscal year 2026. The total reached a record 71.98 billion dollars. This represents a significant increase from the 58 billion dollars recorded in the previous year. International price increases were the primary factor behind this valuation jump.

Physical import volumes declined by 4.76 percent during the same period. The total volume reached 721.03 tonnes. The divergence between value and volume indicates a price-led increase in import costs. This trend places additional strain on the foreign exchange reserves.

Proposal For Policy Review

Kotak proposed the formation of a dedicated committee to address these challenges. The panel would examine the import burden and household demand. He suggested integrating household gold wealth with the formal economy. This approach aims to balance individual requirements with macroeconomic stability.

The jewellery sector faces direct implications from these trends. It accounts for a significant share of domestic gold consumption. The industry remains dependent on imported bullion. GN auto markets/commodities: gold demand reports indicate that policy responses must consider both the import load and consumer behavior.

Market Impact On Jewellery

Rising import costs directly affect the pricing of finished jewellery products. Retailers face higher input costs due to the 24 percent increase in import values. The sector must adapt to sustained high price levels. Consumer demand remains robust despite the higher cost of entry.