November Gold Imports: Commerce Ministry Probing Unusual Surge

The Commerce Ministry is looking into the unusual surge in gold imports for November and examining data for any calculation errors, according to people close to the matter.

On noticing unusual surge, the government's Directorate General of Commercial Intelligence and Statistics—which is a part of the Commerce Ministry—has taken up detailed examination of the gold import data and reconciliation will be done with the data received by Central Board of Indirect Taxes and Customs, as per the people quoted above.

At the routine monthly trade data briefing held on Dec. 16, data had shown that India's merchandise trade deficit widened to a record high of $37.8 billion in November, led by a jump in gold imports.

L Satya Srinivas, additional secretary at the Ministry of Commerce, had said gold worth $14.8 billion was imported in November. Reasons for the surge were noted to be the festive/wedding demand, asset diversification towards gold amid global uncertainties, increasing demand from banks, and reduction in custom duty from 15% to 6%.

The reconciliation comes after Bloomberg reported that the record high import number could be due to a calculation error, with officials double-counting gold shipments in warehouses following a change in methodology in July. The data could have been over-estimated by as much as 50 tons in November, or almost 30% of total imports of the precious metal that month, according to the report.

The data had also pushed the rupee to an all-time low of 84.91 against the US dollar on Dec. 16.