India’s imports of gold and silver doubled in September even as global prices remained elevated. The surge, reported by Kitco, is believed to be driven by importers seeking to beat rising duties at the month-end.
Spike in imports amid price pressures
Despite costly international rates, India’s bullion demand shot up sharply last month. Importers rushed to bring in metal before new duty slabs kicked in, creating a last-minute spike.
The dramatic increase occurred as India’s policy landscape on precious metals remains sensitive to import duties, trade balance pressures, and domestic demand for jewellery and investment.
Duty deadlines and trade strategy
Analysts say importers timed their purchases to precede changes in duty structures, thereby reducing tariff burdens. This behaviour reveals how sensitive import flows remain to government policy tweaks.
Even though gold and silver were expensive globally, the impetus of beating higher duties outweighed cost concerns for many traders.
Demand drivers and domestic consumption
India’s jewellery and bullion demand are long-standing pillars of domestic consumption. Apart from investment motive, cultural and seasonal demands play a big role.
In many parts of India, festivals and wedding seasons trigger strong demand for jewellery—making imports of gold and silver all the more vital.
Risks and trade balance implications
Such heightened import activity, especially when unaccompanied by matching exports, can put pressure on India’s trade balance and current account.
Policymakers must balance encouraging legal and structured imports while curbing smuggling and duty evasion that often accompany surges.
Conclusion
India’s doubling of gold and silver imports in September despite high global prices underscores the sensitivity of trade to duty changes. While beating tariff hikes drove the rush, the trend raises deeper questions about import dependence, policy calibration, and trade balance resilience.