Gold import revision trims India’s record Nov trade deficit by $5 billion

New Delhi: India’s record trade deficit for November has been revised downward to $32.8 billion from $37.8 billion, after the government made a sharp correction in gold import data. 

The Directorate General of Commercial Intelligence and Statistics (DGCIS), an arm of the commerce ministry, said on Wednesday that gold imports for the month were adjusted to $9.8 billion, a substantial reduction from the earlier estimate of $14.8 billion.

The $5-billion revision, attributed to a calculation error caused by alleged double counting of gold shipments in warehouses, emerged after a change in reporting methodology in July. 

The discrepancy was discovered during the process of reconciling figures of the DGCIS and the Central Board of Indirect Taxes and Customs. However, the commerce department has yet to issue an official statement on the revision.

November’s trade figures initially reported a record deficit, driven by an unusual 331% year-on-year surge in gold imports. Gold, which constituted 21% of total merchandise imports for the month, was previously estimated at $14.8 billion, inflating concerns about the country’s trade balance. India sources most of its gold imports from Switzerland, the United Arab Emirates, and Peru.

Revised data

With the revised data, India’s gold imports for November now stand at $9.8 billion, bringing the total value of gold imported during the first eight months of the current financial year to $44 billion.

Prior to the revision, the trade deficit, or the amount by which the value of imports exceeds exports, hit a record $37.8 billion, compared with $21.3 billion in November 2023.

Data released by the commerce ministry on 16 December 2023, showed a 27% y-o-y surge in merchandise imports, accompanied by a 4.9% y-o-y fall in exports in November. Meanwhile, services exports performed strongly, with the November surplus touching a record $18 billion.

With the $5 billion revision in gold import data for November, imports have come down to $64.95 billion from $69.95 billion. The year-ago figure was $55.06 billion. Total exports dropped to $32.11 billion in November, compared to $33.75 billion in November 2023.

So far this fiscal (April-November 2024), total exports stood at $536.25 billion, compared to $498.33 billion in April-November 2023, a growth of 7.61%.

In this period, merchandise exports were driven by electronic goods (7.9% y-o-y growth), engineering goods (26.87%), rice (13.35%) drugs and pharmaceuticals (6.76%), and ready-made garments (15.21%). Major imports included crude oil (7.15% y-o-y growth), electronic goods (10.54%) and gold (49.02%).

India’s major export destinations during this period were the US, UAE, the Netherlands, the UK and Singapore. China, UAE, Russia, US, Saudi Arab and Iraq remained the top suppliers, reflecting the country’s dependence on oil imports.