According to the Ministry of Commerce, gold imports hit an all-time high of 173 tonnes for the month, far surpassing figures from previous years.
For the financial year to date (April-November), gold imports have risen 49% year-on-year, with 2024 poised to exceed 800 tonnes, well above the average annual imports of around 700 tonnes seen over the last two years.
This surge has added to fiscal pressures, including a depreciation of the Indian rupee, which risks making imports costlier.
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Several factors have contributed to this surge in gold imports:
Festive and wedding demand: The last quarter of the calendar year typically sees heightened gold purchases due to festivals and weddings. This year, the demand has been further boosted by nearly 4.8 million weddings between October and mid-January.
Strong investment appeal: Gold’s 30% return in 2024 has drawn increased investor interest, as individuals look to diversify their portfolios amid global uncertainties.
Import duty reduction: The government’s reduction of import duties from 15% to 6% has incentivised legitimate gold imports, cutting down smuggling. Previously, 150-200 tonnes of gold were smuggled into India annually, much of which now flows through official channels.
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Enhanced market transparency: The introduction of hallmark jewellery and growing participation by corporate jewellery players have improved consumer confidence and supported purchases.
While the Ministry of Commerce reported November imports at 173 tonnes, Metals Focus, a leading data provider for the World Gold Council, estimated imports at 136 tonnes. Despite the discrepancy, both figures highlight robust demand.
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