India has a strong emotional and cultural connection with gold. Every year, Indians buy a large quantity of physical gold like jewellery, coins, and bars. Because India does not produce enough gold locally, most of it is imported, which increases the Current Account Deficit (CAD).
current account deficit
India’s Current Account Gap Widens as Trade Blowout Hits
Gold Silver Reports – India’s current account deficit widened from last quarter, with potential to hurt the rupee before an expected rise in interest rates by the U.S. Federal Reserve next week.