Why are Gold Inflows Suddenly Surging into India?

India’s gold imports jumped more than four times to about 12.1 billion dollars in January, after a softer December, and this surge was led mainly by shipments from Switzerland and the UAE. This jump also pushed the monthly trade deficit to a three month high of around 34.7 billion dollars. So gold has again shown how one commodity can swing India’s external numbers in a single month.

The sharp rise in Swiss inflows is the biggest headline because imports from Switzerland rose nearly seven times to about 3.95 billion dollars in January from roughly 592 million dollars in December. Switzerland is a major global refining hub so rising prices and investment buying often first show up as higher Swiss exports. In contrast, UAE inflows grew in a steadier way and rose about 43 percent to 7.05 billion dollars in January because a trade pact gives Indian importers a one percentage point duty discount on gold coming from the UAE. This tax advantage makes the UAE a preferred route and so it keeps drawing Indian demand, even when overall volumes are not rising as quickly.

Behind these monthly moves there is a slow structural shift because over recent years the value of gold imports has climbed while the imported quantity has stayed flat or even fallen. Between 2018 to 2019 and 2024 to 2025, the gold import bill rose from about 32.9 billion to 58 billion dollars even as physical imports dropped from about 983 tonnes to 757 tonnes so price, not volume, is doing most of the work. Early numbers for the current financial year already show almost 49.4 billion dollars of gold imports for 475 tonnes, which again signals high value and lower volume inflows. So when global prices are firm and domestic investors see gold as a safe store of value, months like January with big Swiss and UAE inflows are likely to repeat and will keep influencing the rupee and the trade deficit.