India's gold, silver imports nearly double despite record prices ahead of festivals

India's imports of gold and silver nearly doubled in September from August, defying record high prices, as banks and jewellers rushed to build inventories ahead of festivals and escape higher taxes on imports, trade and government sources said.

-  S VENKAT NARAYAN, OUR SPECIAL CORRESPONDENT

Higher imports by India, the world's second-biggest consumer of the precious metal, are set to support gold prices that hit records this week, even as demand languishes in top buyer China.

The surge in imports could widen India's trade deficit and weigh on the weaker rupee, however. "Jewellers and banks have been clearing a lot of gold from customs over the past two weeks," said a government official, who sought anonymity as he was not authorised to talk to the media. "We haven't seen such a rush in years."