India’s record gold imports last month was reportedly due to an error in calculation. The Indian government is re-examining the surge in gold imports that widened India’s trade deficit.Â
According to a report in Bloomberg, the surge in gold imports that pushed the rupee to an all-time low was due to an error in calculation. Officials double-counted gold shipments in warehouses, the report said. The data could have been overestimated by as much as 50 tons in November, which is almost 30 per cent of the total imports of gold that month.Â
Meanwhile, Reuters reported that India’s Directorate General of Commercial Intelligence and Statistics (DGCIS) has taken up a “detailed examination of the gold import data and reconciliation would be done with the data” received by the tax department.Â
Trade figures are likely to be revised if an error is identified, and traders could expect a correction in the foreign-exchange rate. Moreover, it could also calm concerns about the state of the economy triggered by the data, stated the report.Â
India’s trade deficit buoyed to $37.8 billion in November, driven by an increase in gold imports to a record $14.8 billion from just $3.44 billion a year ago. Even though gold imports have gradually increased, the unprecedented hike stumped analysts.Â
The report said that officials are likely to have added up the imports kept by custodians in free trade zone warehouses with the tallies that were reported by domestic banks that buy the gold from the custodians. Gold is considered an import only after it is checked out from the warehouse.Â
The report added that overall imports of gold could still be within the 800-1,000 tons that India ships in annually.