The Indian government is currently re-evaluating the significant rise in gold imports that contributed to a record trade deficit in November, which also led to the rupee hitting an all-time low. This information comes from two government sources familiar with the situation.
Key Highlights:
Surge in Gold Imports:
Gold imports surged to a record high of $14.8 billion in November, more than doubling from $7.13 billion in October.
The increase in imports has raised concerns about the widening merchandise trade deficit, which reached a staggering $37.84 billion in November, significantly exceeding economists’ forecasts of $23.9 billion.
Methodology Changes and Errors:
Bloomberg News reported that a change in methodology in July led to officials double-counting gold shipments stored in warehouses, resulting in a calculation error.
The Directorate General of Commercial Intelligence and Statistics (DGCIS) is now conducting a “detailed examination” of gold import data, aiming to reconcile it with information from the tax department.
Potential Overestimation:
Sources indicated that gold imports could have been overestimated by as much as 50 tons, which represents nearly 30% of the total gold imports for November.
Government Response:
As of now, the Indian government has not provided an immediate comment regarding the situation or the ongoing examination of the import data.