India’s gold imports fell sharply during January this year to just $2.4 billion, 40.5% lower than the same month in 2021, and almost half the $4.72 billion imported in the previous month. The decline in the yellow metal’s imports was the biggest factor behind India’s import bill dropping to $51.9 billion in January, 12.7% from lower than December 2021.

Experts say the surge in gold imports in 2021 was driven by the pent-up demand of 2020. They are expected to moderate to $30-$35 billion in this calendar year.

Overall merchandise exports touched $34.5 billion in January, 25.3% higher than a year ago, while imports grew at a slightly slower pace, taking the country’s trade deficit to a five-month low of $17.4 billion, as per official estimates released on Tuesday.

While January’s goods exports are 8.75% lower than December’s all-time record figure of $37.81 billion, it takes India’s exports near the $400 billion target set for 2021-22, with the first ten months of the year, already clocking outbound shipments worth $336 billion. This marks a nearly 47% increase from a year ago and a 27.1% increase over the pre-COVID period of 2019-20.

Consequently, the trade deficit that had hit a record $22.9 billion in November 2021, and had averaged 21.7 billion since September, also dropped. Exporters, however, said high imports remain a cause of concern with January’s inbound shipments rising 23.5% year-on-year and staying above the $50 billion mark.