Surge In Gold And Silver Imports Drives Up India’s Trade Deficit
US-China trade tensions continued, and with that, the sustained rush for alternative and safe-haven assets like gold
On Episode 704 of The Core Report, financial journalist Govindraj Ethiraj talks to John Pearson, Global CEO at DHL Express, from a larger conversation featured in our Weekend Edition.
SHOW NOTES
(00:00) Stories of the Day
(00:50) Surge in gold and silver imports drives up India’s trade deficit
(03:55) Oil prices fall on uncertainty but India stands to benefit
(04:46) Why you will stop investing in IPOs if you hear these numbers
(07:35) One country may leave global trade but 219 are embracing it, find out why and how
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Thursday, the 16th of October, and this is Govindraj Ethiraj broadcasting and streaming weekdays, usually from Mumbai, India's financial capital, but presently in transit and attending conferences for the next day. So we might have a shorter edition in the next day or two.
Our top stories and themes,
A surge in gold and silver imports drives up India's trade deficit
Why you will stop investing in IPOs if you hear these numbers.
Oil prices fall on uncertainty, but India does stand to benefit.
One country may be leaving global trade, but 219 are embracing it. Find out why and how.
The March of Gold
Gold prices, of course, continue to rise.
Remember, Bank of America has projected a target of over $5,000 an ounce in a year. On Wednesday, it hit a fresh high crossing, or is it sailing past the $4,200 mark? US-China trade tensions continued, and with that, the sustained rush for alternative and safe-haven assets like gold. Wall Street is still looking strong, potentially for other reasons, including good earnings.
President Donald Trump may have injected uncertainty in global trade and financial markets, but for gold and silver, he's been a blessing. Spot gold was up at $4,199 per ounce Wednesday, after hitting an all-time high of $4,200 per ounce. Back home, the Festival of Dhanteras is around the corner.
A report in Business Standard says investors aren't just buying gold bangles this time, they're buying gold exchange-rated funds, that's ETFs, in record numbers, something that we've noted earlier here as well. According to data from ICRA Analytics, inflows into gold exchange-rated funds have jumped about six times till September 2025, touching about 8,300 crores, compared to about 1,200 crores for the same month last year, which is obviously almost 578%. Moreover, assets under management are now at about 90,000 crores, up 126% year-on-year from last year.
Month-on-flows, it's up 280% from 2,189 crores in August 2025. So you can see the sharpness in the rise between just August and now, given the acceleration in gold prices. There are now 22 gold ETFs available in India, says Business Standard report, with four new funds launched this year, reflecting, of course, the appetite and responding to the rising prices, or rather, shooting prices.
Over the last year, the average one-year return for gold ETFs has been almost 51%, and the five-year compounded annual growth rate is at about 17%. And let's come to stocks now, which obviously are nowhere near gold. Stocks looked up on Wednesday and came close to a one-month high, partly because of an expectation of earnings rebound.
Crude prices are also down, and that's helping, and more on that in a moment. At close, the Sensex was up 575 points to 82,605. The NSE Nifty 50 was up 178 points to 25,323.
In the broader markets, the Nifty Mid-Cap 100 and Small Cap 100 were up 1% and 0.8%. Hyundai Motor, which you may recall listed last October, and since Korean IPOs and companies are in the flavour of the month in the markets, has said it will invest about $5 billion to expand manufacturing and research operations in India. This will also help increase Hyundai's annual production by a third to 1.1 million vehicles by 2030, and it will introduce 26 cars, including its first hybrid vehicle, tailored for India, which is interesting news. It will also launch its luxury car brand, Genesis, in the country, Reuters quoted its CEO, Jose Munoz, saying.
Hyundai listed in India last October, and at that time, the company had committed to invest around $4 billion, and the latest figure is most likely an extension of the same.
Oil Prices Softened
Oil prices were up slightly after closing in five-month lows in the previous session.
The International Energy Agency has predicted a supply surplus in 2026, even as demand could be curtailed by renewed trade tensions between the United States and China. Brent crude futures were at about $62.40 a barrel on Wednesday. The rupee had a good day, soaring to its best one-day gain in nearly four months on Wednesday, thanks to Reserve Bank of India intervention, which supported the currency, while traders also cited unwinding of bearish wages on the currency, according to a Reuters report, which added that the rupee closed at Rs.
88.07, that's zero seven paisa against the dollar, which is up slightly, and that was its best performance since June 2025.
An IPO Jam
There is a massive sale going on in the IPO mall.
Actually, it's not a sale technically, since very few stocks have gone at prices attractive to investors, which is how you would classify a sale, but the numbers, well. For that and other reasons, 38% of companies are trading below their issue price over 2021 to 2025, according to a new report from Kotech Institutional Equities. Moreover, it says an increasing number of IPOs have witnessed tepid listings in the current calendar year, with only 15% of companies delivering a return more than 25% compared to 41% last year.
Moreover, in the last four years, about 27% of companies listed below their issue price. So keep that in mind. 27% of companies that went public in the last four years have listed below their issue price, and 38% of companies are trading below their issue price.
Now, all of this comes in the context of some heavy-duty flows in IPOs, about $14 billion by 80 companies in the current calendar year, compared to about 90 companies in 2024. Most of that money has been raised in the form of offers to sell, which means it's gone to promoters, founders, owners, parent companies, and so on. The report also says data shows a significant proportion of companies have failed to maintain their gains even after a decent listing, and the performance would be even weaker relative to market returns or adjusted for time based on a reasonable cost of capital.
The report also says large and mid-sized IPOs have fared better than small-sized ones, and the broader trend suggests that investor enthusiasm is becoming more selective and valuation-sensitive. There are still about 200 companies with about $35 billion of plans on the sidelines or waiting to raise.
Trade Numbers
Exposure to the United States has fallen to about $5.4 billion from about $6.8 billion in August, with tariffs hitting shipments of goods such as shrimp, textiles, and gems and jewellery, according to a Reuters report. On the other hand, our appetite for gold has increased. Imports have gone to about $9.6 billion from about $5.1 billion in the previous month, thanks to a strong demand for physically-backed gold exchange-traded funds.
As we've mentioned in the past, even if you buy units of a gold exchange-traded fund, you're effectively buying physical gold because that has to be backed up within hours almost by physical stock. Overall imports from the U.S. have risen to about $3.9 billion from $3.6 billion. So you can see how tariffs are working or are not working because exports to the U.S. are down and imports from the U.S. are up, which obviously should be a happy situation for the U.S. trade representative.
India's merchandise trade deficit also widened to a 13-month high of about $32 billion in September, thanks also to that jump in gold and silver imports.
Speaking About Trade…
While there is a lot of tariff gloom, it does not appear that exports or imports globally have been as badly hit as expected. DHL Express CEO John Pearson told me in Mumbai last week that while one country appears to be retreating from global trade, and we all know who that is, 219 countries are embracing it.
According to him, trade is part of the solution. He says that we go to our customers and say, can we help you find other lanes, especially for e-commerce customers, or help you identify how you can keep your supply chains going more effectively? He also says there will be things to fix, like bonded warehouses, duty drawbacks, break box solutions, and so on. DHL Express has about 127,000 service points, 116,000 employees, and is an arm of the larger DHL group and operates in 220 countries.
I asked Pearson how DHL itself was managing the change, even as it calibrated, reorganized, and drove its resources on land, sea, and air, world over, to ship goods and continue to drive world trade.
TRANSCRIPT
Govindraj Ethiraj: And within the DHL Express system, is there a change or shift in the way your staffing and resources are organised to respond to this new world?
John Pearson: Yeah, that's a great question. So the one obvious one is that the aviation assets that we have in Asia, principally China, and the on-the-ground couriers that we have in the U.S., this has changed dramatically. I think the Financial Times published that China-U.S. trade was down 35%. Lower than 800 was nearly 80%. So we need to reconfigure our aviation assets in Asia, move them out to somewhere else, maybe put on the ground higher cost aircraft that we were using in a different part of region, give some back to our partners that were on 30-day, 60-day, 90-day leases. We have a high fixed flex factor in our network.
Our competitors tend to have their own aircraft. We have 70-30. We can give our aircraft back.
Constantly moving around these aircraft to cater to the fact that Asia, and especially China, have slowed down on the U.S. lane. That means we need less couriers and less stops, as we call them, in the U.S., and we've been modifying that every single day. So we've been, a little bit to my presentation earlier today, looking around the corner on what's happening here and making sure we're ahead of the curve, on making sure we've got absolutely the right number of planes leaving Asia with a high weight load factor, which then dictates the CPK, the cost per kilo of those aircraft, and when they land in the U.S., if you bring it down to basics, at the Miami Service Centre, there's a right number of couriers to receive the material that they know is incoming, to have their vans full, and take them out to their customers.
And that will change again, back up. When tariffs change, that will come back up again. I don't expect De Minimis to change anytime soon.
The change has been made, and we now just run with that.
Govindraj Ethiraj: Right. And just on aircraft, you talked about 30-day leases and 60-day leases. That seems very short, I mean, to someone who doesn't know much about this space.
30 days seems short. Short the lease period for your cargo aircraft?
John Pearson: Well, we want it to be as short as possible, because when something happens, we want to give the aircraft back tomorrow. But by the time things become clear, it's a week or two anyway, we're giving an aircraft back in 30 days. So these events have been announced, and the implications are sometimes a month, sometimes immediate.
And there's a lot of paddling beneath the surface using, moving our tails around, giving aircraft back in the case if we are going to give them back. And we've got great partners that we helped through COVID, and they helped through us through COVID. So I think, you know, we can, that fixed flex factor is very satisfactory for our network.
And the fact that we can move these aviation assets around. Take the China-Vietnam situation, I talked to you about the laptops, that's a whole load of capacity that you do not need in China one night, and you need it in Vietnam, the next night, you know, the next week, at least anyway. So we have to be able to put them there and make sure we're providing good capacity for the demand that is now coming from Vietnam that was coming from China.
So it is what we do, though. I mean, hubs, gateways, service centres, aircraft, vans, IT equipment, that's what we do. That's what we can move around.
Trade always has some interruption. Imagine during COVID, how many changes we were having to make.
Govindraj Ethiraj: Right. And a question which I guess applies to your clients as well as to you. COVID, for example, or the European volcano crisis, I mean, those were crisis.
COVID was a volcano, ash was a shorter one. We had a similar one in Southeast Asia as well. Now, a situation like this makes you change the structure or composition of the organisation that you just referred to.
Now, at the same time, there is hope that things will ease off, change, or maybe if there's a change in the next election, the whole thing could reverse. How do organisations navigate this? Do you change everything permanently?
Do you change them semi-permanently? It's a new state of flux in some way, isn't it?
John Pearson: I think we have a fixed cost network. We have hubs, gateways, service centres that move material wherever they're going. So material moves around the world and it typically moves through the same facilities, through to a gateway, through to a service centre.
From where it came and where it's going to, it's a classic hub and spoke system. So I think we're absolutely okay there. We've talked earlier a little bit about, you know, the flexibility within the aviation network.
But I think there's a more interesting point within your point about as these tariffs hit and companies start doing different things with other companies in other countries, is that going to remain? Water always finds a way. And when this water starts finding a weaker path of sand and the water rivulets start going somewhere else, I think the most interesting question is, will that stay?
And will the lanes they were selling on before become, well, we're not going to go back to that. This is fascinating. Now, I think the only way you could answer whether that's the case is if who they sell to and the prices that they sell at and the margins that they sell at are better in the water flowing, finding the new path will dictate that they may well stay.
So the shifting sands of global trade may change forever. Even if the tariff situation is completely unravelled, the US is a big market, people want to be part of that, I'm sure something will return. But the margins on that market will be different to the margins on selling to Australia and New Zealand.
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