Gold imports plunge in December

Gold imports fell sharply in December 2014 to $1.34 billion -- less than one-fourth of $5.61 billion in the previous month -- notwithstanding the easing of import curbs for the precious metal.

However, gold imports were still higher on a year-on-year basis by 7.4% from $1.25 billion in December 2013.

Gold imports were on an upward trend since August when the inbound shipments rose to $2.03 billion from 1.81 billion in July. In September, it was $3.75 billion, while in October imports rose to $4.17 billion.

India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry.

In November 2014, the RBI had easing restrictions on gold imports by scrapping the controversial 80:20 scheme.

Under the 80:20 norm, put in place in August 2013 to curb high gold inflows that was widening the current account deficit, at least 20% of the imported gold had to be mandatorily exported before bringing in new lots.

Earlier in May 2014, the 80:20 norms were relaxed and six private sector trading firms were permitted to import the gold under the scheme. Initially, only state-owned firms and banks were permitted to import.

The six private firms, which were given relaxation, accounted for 40% of the total gold imports during April-September, sources said.

Government has been repeatedly asking people to desist from buying gold and instead invest in other saving instruments.

Higher gold import bill adversely affects the country's current account deficit (CAD).