India Sees $5 Billion Reduction in November Gold Imports, Trade Deficit Narrows

New Delhi, Jan 8 (NationPress) The government has reduced its forecast for gold imports for November 2024 to $9.84 billion, down from the earlier estimate of $14.86 billion released last month, as per data from the Commerce Ministry's Directorate General of Commercial Intelligence and Statistics revealed on Wednesday.

This $5 billion downward adjustment in gold imports will correspondingly decrease the nation’s trade deficit, enhancing macroeconomic fundamentals and providing a boost to the rupee, stated a senior official.

The adjusted figures for gold shipments show a decline of nearly 34 percent compared to previous reports.

Sources indicate that the inflated figure announced earlier resulted from a double-counting error in the gold import estimates, which occurred due to a change in methodology. The gold stored in warehouses by custodians was mistakenly added to the amount reported by domestic banks, leading to the same shipments being counted twice and inflating the estimate.

Despite the increase in gold imports following the duty reduction during the Union Budget in July 2024, the significant spike in shipments for November raised eyebrows among market analysts. Gold imports were reported to have surged over four times compared to $3.4 billion for the same month in the previous year, a figure deemed unlikely.

This situation caused India's trade deficit to reach an unprecedented $37.8 billion, reflecting a weakened external balance position, which negatively affected the rupee.

As the second-largest consumer of gold globally, following China, India relies heavily on imports to meet this demand, particularly during festive and wedding seasons when gold is traditionally gifted to brides and grooms.