What deteriorates India’s current account balance: crude oil imports or gold imports?

ABSTRACT

We examine the impact of crude oil imports and gold imports on India’s current account balance (CAB) using linear cointegration techniques for the period 1980–2017. We find strong evidence in support of a positive and significant impact of crude oil imports and a negative and significant impact of gold imports on India’s CAB. It also reveals that while rising crude oil price deteriorates India’s CAB, rising gold price improves it in the short run.

KEYWORDS:

• Current account deficit
• crude oil
• gold imports
• India

JEL CLASSIFICATION:

• F14
• F41
• C22

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

¹ This model is used as robustness checking cointegrating results.