India Increases Gold Imports

Over the year, monthly gold imports rose 2.3 times. A trade agreement was signed with the European EFTA countries, from which, however, the most important commodity was excluded: gold

Prithviraj Kothari

In February 2024, India imported $6.15 billion worth of gold, double the “standard” monthly imports. According to India’s Ministry of Commerce and Industry, “this was a record result, exceeding imports of February 2023 by 2.3 times and January this year by 3.2 times.” In the first two months of 2024, India imported gold worth $8.06 billion. India is one of the largest importers and consumers of gold in the world, but produces virtually none of the precious metal itself.

In 2023, India imported about 744 tons of gold worth $42.6 billion. But Prithviraj Kothari, president of the Indian Bullion and Jewelers Association, said imports risked a “collapse” in March due to “excessively high” prices.

“Consumers cannot ‘digest’ the exorbitant prices, which will inevitably affect purchases in the current wedding season in India,” Kothari said.

On March 10, 2024, after 15 years of negotiations, India signed a free trade agreement (Trade and Economic Partnership Agreement, TEPA) with Switzerland, Norway, Iceland, and Liechtenstein, four European countries outside the EU but united in the European Free Trade Association (EFTA), to reduce tariffs on a wide range of goods and attract foreign direct investment.

The trade agreement covers more than 95% of EFTA exports to India, but does not address the most important commodity: gold. On the other hand, electrical equipment, watches, and packaged food items will soon no longer be subject to New Delhi’s stringent tariff regimes. In addition to gold, a number of agricultural and dairy products, as well as coal, are also excluded from the agreement.