India Faces Surge in Imported Inflation Amid Rising Gold Imports

India's imported inflation hit a 13-month high with a 2% growth in September 2024, driven by rising prices of gold and other imports. Retail inflation also increased to 5.5% due to food price hikes. The surge highlights the impact of global price fluctuations on India's economy.

India's imported inflation soared to its highest in 13 months, growing by 2% in September 2024, as detailed in a State Bank of India (SBI) report. The report emphasized that imported commodities like gold, oils and fats, and chemical products are increasingly contributing to the nation's overall inflation.

Imported inflation refers to the rising cost of goods and services due to increased prices of imported goods. The report underlined an alarming increase, noting that the contribution of imported inflation to the overall inflation has risen significantly. September's 2% growth in imported inflation marks a concerning peak in over a year, with gold prices playing a major role.

The latest trade figures reveal a surge in gold imports, amounting to USD 10.06 billion in September 2024, up from USD 4.94 billion a year earlier. This represents the highest gold import value from January to September this year. Notably, August witnessed a 103.7% increase in gold import value, whereas the April-August period saw a 25.2% rise, with varied trends in volume.

The escalation in imported inflation coincides with a rise in India's overall inflation. Retail inflation increased sharply to 5.5% in September 2024, up from 3.65% in August, largely driven by food prices. The food and beverages sector alone saw inflation rise to 8.36%, fluctuating significantly from previous months.

The growing proportion of imported inflation deepens the inflationary burden on India's economy. As India remains reliant on essential imports such as gold and edible oils, global price shifts continue to impact domestic inflation levels. The significant rise in gold imports, both in value and volume, underscores the external influences on local markets. (ANI)

(With inputs from agencies.)