ALSO READCustoms checks fail to curb duty free import of gold coins from South Korea As trade deficit falls, Centre may reduce import duty on gold: Official Gold up 3% in 2 days on global factors, Centre's ban on import from S Korea GST impact: Gold import surge from South Korea alarms govt India to import 25 tonnes of duty-free gold from South Korea: Officials
Gold import surged by more than two folds to $16.95 billion during the first half of 2017- 18, according to the commerce ministry data.
Gold import, which has a bearing on the country's current account deficit (CAD), was worth $6.88 billion in April- September 2016-17.
In September this year, import of the precious metal dipped by 5 per cent to $1.71 billion from $1.80 billion in the same month of the previous fiscal.
Contraction in gold import last month helped narrow the country's trade deficit to a 7-month low of $8.98 billion.
However, the import of the metal is expected to increase on account of the festival season, which has started this month.
Increase in inbound shipments of gold also bloated the current account deficit (CAD) to $14.3 billion, or 2.4 per cent of the GDP, in the three months to June in 2017-18.
In general terms, CAD refers to the difference between inflow and outflow of foreign exchange that has an impact on the exchange rate.
Worried over surge in gold imports from South Korea, with which India has a free trade agreement, the government restricted inbound shipments of the precious metal.
India is the world's second biggest gold consumer after China. The import mainly take care of demand of the jewellery industry.
At present, gold import attracts 10 per cent duty. The gems and jewellery industry along with the commerce ministry have time and again urged the finance ministry to consider a cut in the import duty.