India's record gold imports last month were due to a calculation error. The Indian government is re-examining the surge in gold imports that widened India's trade deficit.
According to a report by Bloomberg, the surge in gold imports that pushed the rupee to an all-time low was due to a calculation error. Officials double-counted gold shipments in warehouses, the report said. In November, the data could have been overstated by about 50 tonnes, nearly 30 percent of total gold imports for the month.
Meanwhile, Reuters reported that India's Directorate General of Commercial Intelligence and Statistics (DGCIS) “has carried out a detailed examination of the gold import data and will reconcile it with the data received by the tax department”.
Trading figures are likely to be revised if an error is detected, and traders can expect a correction in the foreign exchange rate. Moreover, the data could calm concerns about the state of the economy fueled by the data, the report said.
India's trade deficit widened to $37.8 billion in November, pushed by higher gold imports to a record $14.8 billion from just $3.44 billion a year ago. Although gold imports have been rising steadily, the unprecedented surge surprised analysts.
Officials are likely to collate imports kept by custodians in free trade zone warehouses with counts reported by domestic banks that buy gold from custodians, the report said. Gold is considered an import only after it is inspected by the warehouse.
The report added that total gold imports could still be around 800-1,000 tonnes that India ships annually.