After recording significant decline in September, gold and silver imports jumped by 62.5 per cent to USD 1.3 billion in October this year. In September the imports fell by over 80 per cent year-on-year to USD 0.8 billion. In October 2012, the imports stood at USD 6.8 billion.
The RBI's 80:20 scheme for gold imports had left many confused, leading to imports being held up at customs.
"Gold and silver imports in October was high due to the confusion over 80:20 issue," Commerce Secretary S R Rao said.
During the first seven months of this fiscal, however, gold and silver imports declined by 12.86 per cent to USD 24 billion from USD 28 billion in the same period last year.
The inbound shipments grew mainly due to the festival season and clearing of air on a RBI norm for gold imports.
Increase in the gold and silver imports have pushed the trade deficit to USD 10.5 billion in October, the second lowest during the year, from USD 6.76 billion in September 2013. But the trade gap is low as compared to October 2012 when it was USD 20.2 billion.
The current account deficit (CAD) touched a historic high of 4.8 per cent 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 per cent since April 30, exposing the economy to balance of payments problems.
The government had recently hiked import duty on gold for the third time in a year to 10 per cent from 8 per cent and also banned imports of gold coins and medallions.
Further, the RBI also restricted import of gold to a consignment basis by banks.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. Import of the precious metal stood at 845 tonnes in 2012-13.