Gold and silver imports declined 71.4 per cent to $ 1.63 billion in February mainly due to restrictions imposed by the government on inbound shipments of the yellow metal to narrow the current account deficit.
Imports of gold and silver in February 2013 stood at $ 5.24 billion. In January this year, they were $ 1.72 billion.
Imports of the precious metals during April-February declined 41.47 per cent to $ 30.7 billion from $ 52.4 billion a year earlier.
Lower imports helped to narrow the trade deficit to $ 8.13 billion in February from $ 14.1 billion.
India’s current account deficit (CAD), which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent 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.
According to a finance ministry official, the CAD is expected to fall by almost 50 per cent to $ 45 billion in the current financial year.
The Reserve Bank had last month projected CAD at less than $ 50 billion, or 2.5 per cent of GDP, down from $ 88.2 billion, or 4.8 per cent of GDP, in 2012-13.
The government had increased customs duty on gold to 10 per cent 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.