Is November trade data 'Gold standard'?

New Delhi: India's record high trade deficit in November may have resulted from a data error, people familiar with the development said, adding that the commerce and industry ministry has ordered an inquiry into whether gold shipments were counted twice due to change in methodology.

"On noticing the unusual surge, the DGCIS (Directorate General of Commercial Intelligence and Statistics) has taken up a detailed examination of the gold import data. Reconciliation of the data will be done, hopefully within this month," a commerce and industry ministry official said on condition of anonymity. Trade data for November 2024 may undergo revision following the reconciliation.

A trade expert, who did not wish to be identified, said details of imports can be cross-verified with bills of entry, forex outgo and import duty payment-all of which are well documented on the Electronics Data Interchange system.


"Even if warehoused (which gold invariably is), it is well documented both at the time of entry into the warehouse and when cleared from the warehouse," said the person, questioning the move.

All-time high

Official data released on Monday showed that gold imports in November touched an all-time high of $14.8 billion, widening the trade deficit to a record $37.84 billion. Imports increased 27% year-on-year to a record $69.95 billion while exports contracted 4.85% to $32.11 billion.

Gold imports amounted to $3.44 billion in November 2023. Traders have attributed the jump in November this year to festive demand and reduction in customs duty, which was slashed to 6% from 15%.

Cumulatively, gold imports during April-November surged 49% to $49 billion against $32.93 billion in the year-ago period.

The Opposition on Wednesday flagged the widening of trade deficit, with the leader of opposition in Lok Sabha Rahul Gandhi saying, "What happens when a government prioritises crony businesses over play-fair businesses?"

In a post on X, tagging a media report which said that trade deficit and imports were at an all-time high, he further said, "Result: Weakened manufacturing sector, depreciating currency, record high trade deficits, high interest rates, falling consumption and soaring inflation."