India's November Trade Deficit Remains At Record High Despite Gold Imports Correction

Despite a downward revision in gold imports, India's merchandise trade deficit remains at a record high in November.

The government on Wednesday sharply corrected the surge it saw in November gold imports, from $14.8 billion to $9.8 billion. The earlier figure was erroneous due to a calculation error, caused by likely double counting in warehouses.

Post the revision, the merchandise trade gap narrowed to approximately $32.8 billion from $37.8 billion in November, in absolute terms.

The overall merchandise imports during the month now stands at $64.9 billion, lower than the previous estimate of $69.95 billion.

Gold imports, despite being reduced by around a third in the revised estimates, remain significantly high in November. The surge was driven by festive demand, wedding season, and asset diversification amid global uncertainties.

The increasing demand for the metal from banks, and the reduction in custom duty from 15% to 6%—as announced in the July budget—are also among the key reasons behind the surge in demand for gold in recent period, according to L Satya Srinivas, additional secretary in the Ministry of Commerce.