NEW DELHI: The sharp jump in November merchandise trade deficit was because of a clerical error. The Directorate General of Commercial Intelligence and Statistics (DGCI&S) on Wednesday revised India’s gold import figure for November 2024 from $14.8 billion to $9.9 billion—a decline of 33%.
The November goods trade deficit rose to an all-time high of $37.8 billion due a massive year-on-year surge in gold imports. Data from the Ministry of Commerce had shown gold imports rose 4.3 times YoY to $14.8 billion during the month. However, soon after the release of the trade data, it was being speculated that the increase in the trade deficit was largely due to an error in recording gold imports.
The ministry never came up with a clarification on the issue. However, on Wednesday DGCI&S, an organisation under the Ministry of Commerce, for collection, compilation and dissemination of trade statistics – revised the November gold import data without any explanation.
The downward revision in gold import should cut India’s goods trade deficit in November to $32.7 billion from the earlier $37.8 billion, if everything else remains the same. While this is a positive development, analysts raise questions on ‘unexplained’ revision of gold imports figure.
“In the interest of transparency, the government must clearly explain the rationale behind this revision. Was there an error in the initial data compilation, or did DGCI&S uncover discrepancies after further verification? Without a clear explanation, such revisions erode trust in official statistics, especially when no changes were made to the data compilation rules in November,” says Ajay Srivastava, founder, Global Trade Research Initiative (GTRI).
A query sent to the ministry remained unanswered at the time of filing of this report. Despite the revision, the year-on-year growth in gold imports remains high at 186% (in November 2023, India imported $3.4 billion worth of gold).
The unprecedented jump in gold imports in November had left many analysts clueless as they feel festive demand alone cannot explain the jump in gold imports.
According to Nomura, the rise in gold imports this November cannot be explained by festive demand alone, and “it represents a meaningful step up in gold purchases for reasons unclear to us”.
Total gold imports stood at $44 bn till Nov
In FY25 till Nov 2024, total gold imports stood at $44 bn, 34% higher than a year-ago period. Analysts have partially attributed this to import duty cut from 15-6% in July budget. The free trade pact with the UAE, effective since May 1 2022, has also contributed to the surge.