Gold and silver imports fell by over 80% to $0.8 billion in September on account of a slew of measures taken by the government to curb inbound shipments of the yellow metal. This is likely to help the government narrow the record current account deficit (CAD).
Imports in September 2012 stood at $4.6 billion. Total merchandise imports have also declined, helping narrowing the trade deficit to a 30-month low of $6.76 billion in the month under review, according to the commerce ministry.
Commerce secretary SR Rao said: "The government has taken steps to curtail imports of non-essential commodities particularly precious stones. That is the singular reason for a decline in the trade deficit."
The CAD touched a historical high of 4.8% of GDP in the last fiscal. The rise in CAD was mainly attributed to high imports of gold and petroleum products.
The high level of CAD puts pressure on the rupee, which has depreciated by about 15% since April 30, exposing the economy to a balance-of- payments problem.
In the first half of this fiscal, gold and silver imports grew 8.7% to $23.1 billion as against $21.2 billion in the same period last year.
The government had recently hiked import duty for the third time in a year to 10% from 8% and also banned imports of gold coins and medallions. Further, the RBI also restricted the import of gold on a consignment basis by banks.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Imports stood at around 830 tonne in 2012-13.