According to informed sources, last month's record expansion of India's trade deficit and the rupee falling to an all-time low were caused by a surge in Gold imports, which may have resulted from calculation errors.

Informed sources stated that after changes in the statistical method in July, Indian officials had double-counted the volume of Gold shipments in warehouses. Anonymous requests were made until an official clarification is provided. Some informed sources said efforts are currently underway to coordinate this data, and November’s figures may be overestimated by as much as 50 tons, accounting for nearly 30% of the total Gold imports for that month.

If errors are indeed confirmed, then the trade figures may be revised, and traders might anticipate adjustments to Forex exchange rates. This would also alleviate the intense speculation about the state of India's economy prompted by the data, as economists consider whether the surge in Gold purchases indicates a need to hedge against inflation or suggests a boom in inland areas due to good crop yields.

Analysts Sonal Varma and Aurodeep Nandi from Nomura Holdings wrote in a report following the release of the trade figures: 'We believe that the increase in November's Gold imports cannot be explained solely by festive demand, representing a significant rise in Gold procurement, but the reasons remain unclear to us.'

India's trade deficit surged to an unprecedented $37.8 billion in November, primarily due to a fourfold increase in Gold imports, reaching a record $14.8 billion, compared to just $3.44 billion during the same period last year. Although Gold imports have been steadily rising since the government reduced the Gold import tax from 15% to 6% in the July budget, this sharp increase has puzzled Analysts.

According to individuals familiar with India's import system, officials may have combined the imported Gold held by custodians in free trade zone warehouses with the amounts reported by domestic Banks (which purchase Gold from custodians) in the statistics.

Generally, Gold is not considered imported until it is withdrawn from the warehouse. However, the recent integration of the customs clearance system is seen as a potential source of problems.

As of the end of June, import customs declarations for "warehousing" and "offshore goods" not considered as imports are maintained by the Ministry of Commerce's SEZ Online system, while customs declarations for actual imports classified as "self-consumed goods" are processed by India's Customs Electronic Trade / Electronic Data Interchange (ICEGATE). Since July, ICEGATE has integrated storage and consumption data into a common system to accelerate data dissemination.

The issue of duplicate calculations may not have been noticed earlier, becoming apparent only in November, as domestic prices in India were at least 10% lower than international prices, triggering a disproportionate amount of procurement and significantly driving up import data.

Some people stated that the total amount of Gold imported by India each year may still be within 800 to 1,000 tons, but added that the final data coordination has not yet been completed.