By Shruti Srivastava and Swansy Afonso
Gold imports by India, the world’s second-biggest consumer, surged about 40% in August on strong festive buying, a person familiar said, threatening to blow out the trade deficit that has already been high due to rising oil prices.
The value of inbound gold shipments grew to $4.9 billion in August from $3.5 billion a year earlier, according to a person familiar with the matter. The numbers are provisional and could change, said the person, who asked not to be identified as the information isn’t public.
The numbers emerge days before the government is due to report overall trade data on Sept. 15. India’s trade deficit is estimated at $21 billion in a Bloomberg survey of economists. A trade ministry spokesperson said August trade data is still being compiled and it would be premature to comment on the figures, while a Finance Ministry spokesperson couldn’t be reached on the mobile for comment.
Gold purchases usually pick up in the second half of the year during festivals, which culminate with Diwali in October or November, weddings and as an auspicious investment. An expected rise in purchases during the festive months could help pare a drop in this year’s consumption, hit by elevated local prices and a slowdown in discretionary spending.
The value of gold imports also jumped during August partly because of a rise of 12% in overseas spot prices in the past year and a lower base in 2022 when imports slumped 30%.
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Overall, demand in the South Asian nation is forecast to drop this year to 650 tons to 750 tons, the lowest since the coronavirus pandemic hit the country in 2020, the World Gold Council said in August. India imports almost all the gold it uses mainly from Switzerland.
The Commerce Ministry also compiles gold trade data, which may differ from the Finance Ministry’s numbers.
--With assistance from James Poole.