Gold and silver imports declined 40% to $33.46 billion in 2013-14 mainly due to restrictions imposed by the government on inbound shipments of the precious metal to narrow the current account deficit.
Imports of gold and silver in 2012-13 stood at $55.79 billion. In March, the imports of the precious metals were down by 17.27% to $2.75 billion from $3.33 billion in the same month previous year.
Lower imports helped to narrow the trade deficit to $138.59 billion in the previous fiscal. India's current account deficit (CAD), which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 % of GDP in 2012-13, mainly due to rising imports of petroleum products and gold.
A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation.
Recently, finance minister P Chidambaram projected CAD during 2013-14 at about 35 billion, or about 2%of GDP, down from $88.2 billion, or 4.8% of GDP, in 2012-13.
The government had increased customs duty on gold to 10% and banned import of gold coins and medallions, while the RBI linked imports of the metal to exports.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Imports stood at about 830 tonnes in 2012-13.
The commerce ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports, which declined by 8.82% in 2013-14 to $39.52 billion.