India’s gold imports declined 79 per cent in December to 20 tonnes against 95 tonnes a year ago amid sharp rise in prices in rupee terms, weak demand and a surge in smuggling.

A as result, gold imports in 2022 dropped 34 per cent to 706 tonnes from 1,068 tonnes a year ago, bullion sources said.

In the first three quarters of 2022, gold imports were down 26 per cent at 559 tonnes against 752 tonnes during the same period in 2021, according to the World Gold Council which is yet to release its report for the third quarter.

Imports hit the lowest in two decades in December as the demand plunged due to high prices. Gold prices increased by ₹1,815 per 10 grams or three per cent during December-end to ₹54,935 per 10 grams against ₹53,120 registered on December 1, according to the Indian Bullion and Jewellers Association.

Prices have further rallied to ₹56,110 so far this month in line with the global markets. In the US, gold rose to eight-month high of $1,881.41 an ounce on weak dollar on Thursday.

Moreover, lack of any wedding or festival season sapped gold jewellery demand in December

In November, the government increased the gold import prices for calculating duty at $56,200 per kg from $53,100 fixed in October. The price of gold in any form except medallions was raised to $56,200 a kg from $53,100.

The trend is in tune with gold refining coming to a standstill as refiners have been unable to sell bullion despite a busy wedding season ahead. Refiners say due to widespread smuggling and a hefty import duty of 18 per cent on gold, refiners are unable to record any bullion sales over the past six weeks.

The World Gold Council has estimated gold smuggling to increase by 33 per cent to 160 tonnes in 2022 compared to the pre-pandemic period. Gold refining capacity of the 33 refiners in the country is 1,800 tonnes.