High prices of imported crude, gold, and chemicals contributed to high inflation: SBI report
Oct 17, 2024
New Delhi [India], October 17 : India's imported inflation reached a 13-month high in September 2024, growing by 2 per cent, according to a report by the State Bank of India (SBI).
The report highlighted that imported inflation is increasingly contributing to the country's overall inflation, as rising prices of gold, oils and fats, and chemical products drive the increase.
Imported inflation is the increase in the price of goods and services in a country due to higher costs of imported products.
The report noted a concerning trend and said, "The share of imported inflation in the overall inflation has also risen. The imported inflation has registered a growth of 2 per cent in September, which is the highest reading in the last 13 months. Gold prices, oils and fats, and chemical products are major contributors to imported inflation."
As per the latest trade data figures this surge in imports is particularly in gold. The country imported USD 10.06 billion worth of gold in September 2024, a significant jump from USD 4.94 billion in the same month last year.
This marks the highest gold import value from January to September this year. In August 2024 alone, gold imports increased by 103.7 per cent in value terms, while in the period of April-August 2024-25, imports grew by 25.2 per cent. However, in volume terms, gold imports saw a mixed trend, rising by 62.24% in August but declining by 2.18% for the April-August period.
The rising imported inflation comes at a time when India's overall inflation is also on the rise. Retail inflation in India reached a nine-month high of 5.5 per cent in September 2024, compared to 3.65 per cent in August, driven primarily by a sharp increase in food prices.
Food and beverages inflation surged to 8.36 per cent in September, up from 5.30 per cent in August and 6.30 per cent in September 2023. Within the food sector, vegetable prices saw a significant rise, contributing 2.34 per cent to the overall inflation rate.
The rising share of imported inflation adds to the inflationary pressures on the Indian economy. As India continues to import essential commodities like gold and edible oils, global price fluctuations directly impact domestic inflation levels.
The sharp increase in gold imports in both value and volume terms highlights how external factors are influencing domestic markets.
