October gold imports surge makes up for H1 deficit

NEW DELHI: Amid rising prices, Indian consumers were shunning the purchase of gold, resulting in lower import of the yellow metal - both in value and quantity terms - during first half of the financial year.But, they seem to have come back with a vengeance in Oct, coinciding with GST rate reduction, making up for the deficit in the first half. Gold imports are estimated to have surged three times to $14.7 billion in Oct, from $4.2 billion in the corresponding period in 2024. As a result, during April-Oct, gold imports were up 21% to $41.2 billion. (see graphic).Unlike gold, which is largely seen as an investment, silver imports were up both in value and volume terms.

The value of these shipments was seen to be 52% higher at $3.2 billion during the first half. But a 6.3-fold surge to $2.7 billion Oct meant that silver imports so far this year were 2.4 times higher at $5.9 billion."The rise in silver imports is attributed to an increase in international price and also due to higher industrial demand in sectors, such as solar panel, electronics, EVs and pharma," DGFT Ajay Bhadoo said, while disclosing the numbers.

In the first half, silver prices (based on unit value of imports) are seen to have been 26% higher, while there was a 22% increase in the case of gold.The spike in Oct is seen to have been due to the festival demand, commerce secretary Rajesh Agrawal said. Gold and silver purchases increase ahead of Diwali. "We export around 800 tonnes of gold (annually) and we have crossed the halfway mark. In case we go to the same level of purchase, there will be a challenge because a 20-25% increase in prices will increase the import bill," he said. Apart from Diwali and Dhanteras related demand, some imports may have been on account of the wedding season.