Spiraling Gold and Silver Imports double India's Trade Deficit in September

Author: Paul Ploumis15 Oct 2014 Last updated at 08:34:15 GMT

NEW DELHI (Scrap Monster): India’s Trade Deficit doubled during September, thanks to sharp rise in gold and silver imports. The deficit widened to $14.25 billion, more than double when compared with the trade deficit of $6.10 billion during the same month a year ago. Gold and Silver imports surged during the month. Overall merchandise imports surged nearly 26% over the year, whereas exports reported meager growth of 3% during Sep ’14.

The gold imports during Sep ’14 zoomed by over 450% to $3.75 billion. Silver imports too surged by 225% to $477 million. The combined import bill for gold and silver during the month totaled $4.23 billion, registering five-fold increase upon comparison with the net import bill of $830 million during September last year.

Gold imports have more than doubled to 9 tonnes in September when compared with 3.38 tonnes imported in August. The Silver imports increased from 218 tonnes in Sep ’13 to 690 tonnes during last month. According to trade sources, premier and star trading houses imported increased volumes of gold and silver in anticipation of better festive season demand.

Strict regulations were in place for gold imports during September last year, which resulted in extremely low imports. However, the government had relaxed certain gold import norms by allowing more star houses to import the yellow metal. The sudden rise in gold imports will most likely dilute the demands for duty cut on gold imports, at least in the near future.