India has seen a significant spike in gold and silver imports in September, nearly doubling from August levels, despite soaring prices. This influx is primarily driven by banks and jewellers eager to build inventories before festival season and anticipated hikes in import taxes, explained industry insiders and government officials.
As the world’s second-largest consumer of gold, India’s higher imports contribute to sustaining global gold prices, even as demand in top consumer China wanes. However, this increase in imports could exacerbate the country’s trade deficit and put further pressure on the already struggling rupee, experts warn.
Jewellers who refrained from purchasing in recent months due to high costs are now stocking up, paying a premium, particularly ahead of the auspicious Diwali festival in October. Meanwhile, the gap between India’s buying at premiums and China’s selling at steep discounts reflects contrasting market dynamics between the two largest gold consumers.