Western Asia Crisis Triggers Shift in India's Gold Import Patterns

India's Gold Imports Shift Geographically Amid West Asia Crisis

India's gold imports underwent a significant shift in sourcing during the peak of the West Asia crisis in March, with supplies from the Gulf collapsing and shipments from Switzerland, Latin America, and African producers rising sharply, commerce ministry data shows.

In March, India imported $3.06 billion worth of gold, down 58.9 percent month-on-month from February's $7.45 billion and 31.6 percent lower from the previous year. Despite the March correction, India's annual gold import bill remained elevated, with FY26 imports rising 24.1 percent to $71.98 billion.

The data suggests that while overall gold imports cooled sharply in March after February's spike, Indian importers began aggressively diversifying sourcing routes away from traditional Gulf-linked suppliers as geopolitical tensions intensified. This shift was most pronounced in the case of the United Arab Emirates, historically India's dominant gold supplier.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Gold imports from the UAE collapsed to $179.8 million in March 2026, a 93.5 percent year-on-year decline, and an 82 percent fall compared to February 2026. The UAE's share in India's monthly gold imports crashed from 62.2 percent in March 2025 to just 5.9 percent in the same month during 2026.

Imports from Saudi Arabia also reflected volatility in Gulf-linked trade flows. Shipments from Saudi Arabia rose sharply to $109.8 million in February 2026 from $27.7 million a year earlier, but disappeared entirely in March 2026.

As Gulf supplies weakened, Indian importers sharply increased sourcing from other regions. Switzerland, already one of India's largest bullion suppliers, strengthened its position further. Swiss imports surged to $2.38 billion in February before moderating to $524.5 million in March, which was still higher than the $458.4 million imported in March 2025. Switzerland's share in India's March gold imports increased from 10.2 percent a year earlier to 17.1 percent.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Latin American suppliers also recorded steep increases. Imports from Peru surged, raising its share in gold imports from 5.8 percent to 32.8 percent. Other Latin American suppliers, such as Chile and Bolivia, also recorded significant increases.

India also widened sourcing from African producers. Imports from Guinea increased from $48 million in February to $148 million in March, while those from Burkina Faso rose from negligible levels to $116 million in March. Imports from Ghana, which surged to $852 million in February 2026, moderated to $99 million in March but remained elevated compared to historical levels.

The data indicates that Indian bullion importers rapidly diversified sourcing away from traditional Gulf-linked routes as the West Asia crisis intensified. While gold imports moderated in March, India's FY26 import bill was elevated, underscoring the government's concerns over foreign exchange outflows highlighted by Prime Minister Narendra Modi.

On May 10, Modi urged Indians to avoid "non-essential" gold purchases for a year as India battles elevated crude oil prices and geopolitical uncertainty linked to the West Asia conflict. India imports nearly all of its gold requirements and more than 85 percent of its crude oil needs. Spikes in oil and bullion imports can widen the current account deficit and increase pressure on the rupee.