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India’s record gold imports last month were reportedly due to a miscalculation. The Indian government is re-examining the surge in gold imports that widened the country’s trade deficit.
According to a Bloomberg report, the surge in gold imports that drove the rupee to a record low was due to a miscalculation. Officials double-counted gold shipments at the warehouses, the report said. The data could have been overestimated by up to 50 tons in November, representing almost 30 percent of total gold imports that month.
Meanwhile, Reuters reported that India’s Directorate General of Trade Intelligence and Statistics (DGCIS) has undertaken a “detailed examination of gold import data and reconciliation will be made with the data” received by the tax department.
Trading figures are likely to be revised if an error is identified, and traders could expect a correction in the exchange rate. Additionally, it could also calm concerns about the state of the economy sparked by the data, the report states.
India’s trade deficit rose to $37.8 billion in November, driven by a rise in gold imports to a record $14.8 billion from just $3.44 billion a year ago. Although gold imports have gradually increased, the unprecedented increase left analysts perplexed.
The report says officials likely added up imports held by custodians in free trade zone warehouses with counts reported by national banks that buy the gold from custodians. Gold is considered an import only after it is removed from the warehouse.
The report adds that total gold imports could still be within the 800-1,000 tonnes that India ships annually.
