India’s gold and silver imports nearly doubled in September 2025 despite record-high domestic prices, as banks and jewellers rushed to build inventories ahead of the festive season and a possible increase in import base prices. The surge, while supporting global bullion markets, risks widening India’s trade deficit and putting additional pressure on the rupee.
Core Development
Gold imports: 64.17 tons worth $5.4 billion in August; September volumes expected to nearly double.
Silver imports: 410.8 tons worth $451.6 million in August; imports surged in September.
Domestic prices: Gold futures hit a record ₹1.17 lakh per 10g, silver touched ₹1.44 lakh per kg.
Dealers reported paying $8 per ounce premiums over official domestic prices to stock up ahead of Diwali.
Jewellers and banks cleared large consignments through customs in recent weeks, with even higher clearances expected before base import price revisions.
Key Drivers / Issues
Festive demand: Diwali and wedding season spurred advance stocking.
Tax timing: Anticipation of higher import base prices pushed accelerated purchases.
Global trends: China’s weak demand contrasted India’s surge, surprising global bullion markets.
Investment appetite: High prices failed to deter buyers, with gold still seen as a safe-haven asset.
Stakeholder Impact
For jewellers, advance stocking secures supply ahead of peak demand. Consumers may face elevated retail prices but continue buying due to cultural significance. Government finances face pressure from a higher import bill, risking a wider current account deficit. Global bullion markets benefit from India’s demand offsetting weak Chinese activity.
Industry & Policy Reactions
Traders said India’s strong buying “surprised the market,” with premiums rising amid robust demand. Analysts noted the sharp divergence from China, where dealers offered steep discounts to attract buyers.
Challenges Ahead
Managing trade deficit pressures and rupee weakness.
Monitoring risks of import-driven inflation in jewellery and allied sectors.
Sustaining demand if global bullion prices climb further.
Strategic Outlook
India’s strong festive-driven imports highlight the country’s cultural and financial reliance on bullion, even at record highs. Policymakers will need to balance festive season demand with broader macroeconomic risks tied to external accounts.
Why This Matters
The surge underlines India’s outsized role in global gold markets. While festive demand supports jewellers and bullion trade, it raises concerns about trade balances and currency stability amid already volatile global conditions.
