Transmission of data from the special economic zone (SEZ) portal to the Indian Customs Electronic Gateway (Icegate) may have led to calculation errors in the case of gold. Officials ruled out a similar issue with any other commodity.
“SEZ Online was merged with Icegate in July,” an official said. “We will examine the import data since then, and it could be recast.” Another official said, “We are checking if there are errors related to this transition. Sometimes, there are flaws when we shift to a new system. So, all imports (numbers) will be checked if that is the case.”
A similar issue had surfaced in 2011, when over-reporting of export data on account of misclassification, as well as double counting due to problems in the computer software, had led to the recast of systems at the erstwhile DGCEI. The Directorate General of Central Excise Intelligence is now the Directorate General of GST Intelligence (DGGI).
India’s exports rose 2.17% to $284.31 billion, and imports by 8.35% to $486.73 billion, during April-November, according to data released on December 16. The trade deficit widened to $202.42 billion, from $170.98 billion in the year-ago period.
Another official said it was likely gold imports to SEZ warehouses and movement to the domestic tariff area had been double-counted.Any product entering India’s territory through filing of bills of entry at Customs is counted as an import. Any movement of gold within the country for use in SEZs, export-oriented units (EOUs), or the Gujarat International Finance Tec-City (GIFT City) for subsequent domestic sales should not figure in total import calculations. Separate data on gold imports by free trade warehouses at GIFT City have been shared with the Directorate General of Commercial Intelligence and Statistics (DGCIS) since May 2023, and it needs to be seen how errors may have crept in.
The commerce and industry ministry on Wednesday ordered a probe into the data. Official data released on December 16 had shown that gold imports in November touched an all-time high of $14.8 billion, widening the trade deficit to a record $37.84 billion. Imports increased 27% year-on-year to a record $69.95 billion, while exports contracted 4.85% to $32.11 billion.
The commerce and industry ministry releases trade data every month that doesn’t include gold imported by the Reserve Bank of India. This gets included in the capital account.
The industry said the rise in value doesn’t imply a rise in volumes. “It’s pertinent to understand that the increase in value doesn’t necessarily translate to a significant rise in physical volumes,” said Vipul Shah, chairman of the Gem and Jewellery Export Promotion Council (GJEPC).
In FY24, India imported 795.25 tonnes of gold valued at $45.54 billion, while in the current fiscal year, it imported 658.21 tonnes in April-November, valued at $49 billion.
“The rise in value terms can best be attributed to the nearly 30% rise in the gold price and also the decline in the gold price in November after Donald Trump’s election,” he said.
India’s annual gold imports have historically fluctuated between 650 and 1,000 tonnes on-year for the last 10 years, and the current trend of April-November 2024 aligns with this pattern. Shah said India’s gold imports do not appear headed toward 1,000 tonnes.
Imports of petroleum, crude and products rose 7.88% in November to $16.11 billion, while in the first eight months of the fiscal, they were $123.26 billion, up 7.15% from the year earlier. Domestic petroleum, oil and lubricants consumption accounts for about 73.6% of total local production, and imports of crude oil and petroleum products make up the rest.