Gold Imports surge in November: Commerce Ministry examining data for any calculation error

The government is examining if there were any calculation mistakes in the compilation of the gold imports data in November, as the sharp surge pushed the trade deficit to a record last month, an official said on Wednesday.

The rupee also hit an all-time low of 84.91 against the US Dollar on December 16.

The jump in gold imports pushed the country’s trade deficit (difference between imports and exports) to a record USD 37.84 billion in November.

“On noticing unusual surge, DGCIS (Directorate General of Commercial Intelligence and Statistics) has taken up detailed examination of the gold import data and reconciliation would be done with the data received by CBIC (Central Board of Indirect Taxes and Customs),” the official said.

Kolkata-based Directorate General of Commercial Intelligence and Statistics (DGCI&S), under the Ministry of Commerce, is an organisation for the collection, compilation and dissemination of India’s trade statistics and commercial information.

The country’s gold imports in November reached a record high of USD 14.86 billion, registering a four-fold increase, mainly on account of festival and wedding demands.

Gold imports stood at USD 3.44 billion in November 2023.

Cumulatively, imports during April-November this fiscal rose 49 per cent to USD 49 billion against USD 32.93 billion a year ago.

According to the ministry, gold, with about 25 per cent average annual return, is one of the best-performing assets in 2024 (till November), and high imports indicate strong investor confidence in the precious metal as a safe asset.

The other reasons include asset diversification towards gold due to global uncertainties, increasing demand from banks, and cuts in customs duties.

Prices of the yellow metal have increased 23 per cent so far this year to Rs 78,350 per 10 gm in the national capital.

In the Budget, the government slashed the duty from 15 per cent to 6 per cent.

India’s gold imports, which have a bearing on the country’s current account deficit (CAD), surged 30 per cent to USD 45.54 billion in 2023-24.

Switzerland is the largest source of gold imports, with about 40 per cent share, followed by the UAE (over 16 per cent) and South Africa (about 10 per cent).

The precious metal accounts for over 5 per cent of the country’s total imports.

India is the world’s second-biggest gold consumer after China. It imports about 800-900 tonnes annually.

The imports mainly take care of the demand by the jewellery industry.

Gems and jewellery exports last month declined 25.32 per cent year-on-year to USD 17.43 billion.

The country’s CAD widened marginally to USD 9.7 billion, or 1.1 per cent of the GDP, in April-June 2024 against USD 8.9 billion, or 1 per cent, in the year-ago period.

A current account deficit occurs when the value of goods and services imported and other payments exceed the value of the export of goods and services and other receipts by a country in a particular period.

India is seeking a review of certain provisions of the free trade agreement with the UAE, which came into force on May 1, 2022.

The review assumes significance as experts have raised serious concerns over the spurt in imports of precious metals from the UAE under the trade agreement.

(Except for the headline, this story has not been edited by Editorji News Desk and is published from a syndicated feed.)