Datanomics: Bullion imports may widen current account deficit in Q4FY26

Surge in gold and silver imports drives January trade deficit to $34.68 billion, raising concerns over a wider current account deficit in Q4FY26

India imported goods worth $71.24 billion in January 2026. Crude oil products, gold and silver constituted over 38 per cent of the imports. Despite relatively soft crude oil prices, a jump in the prices of gold and silver has not only inflated India’s trade deficit, but may also impact its current account deficit (CAD) in the fourth quarter of 2025-26.

 

Gold-silver share in imports at highest in a decade (Share of oil, gold and silver in India's imports (in %))

 

From April to January in FY26, import value of crude oil and related products, gold and silver was over one-third of India’s total import bill. The share of gold and silver in imports has reached decade-high levels, while the share of crude oil has come down. 

 

Prices of gold and silver skyrocket (Unit prices of oil, gold and silver (in $))

 

While the average per unit crude oil price has come down in the first three quarters of FY26, the average per unit import price of gold and silver has increased year-on-year by 25.15 per cent and 47.58 per cent, respectively, in FY26 (Apr-Dec). 

 

Services and remittances help reduce CAD (India's current account balance (in $ bn))

 

A rise in export earnings from the services sector as well as a steady rise in remittance inflows has kept India’s CAD relatively low in FY24 and FY25. However, India’s trade deficit of $34.68 billion in January 2026 is poised to widen the CAD.