Gold imports to start immediately - trade ministry source

NEW DELHI (Reuters) - India's gold imports will resume immediately after a two-month gap as the government and banks sorted out how new rules on overseas purchases should work at a high-level meeting on Friday, a trade ministry source told reporters.

Monthly shipments by the world's top importer are however unlikely to be even a quarter of the record volumes in May and total annual imports will be sharply down, helping the government cut a bulging current account deficit and support the weak rupee.

At least 20 percent of the gold imports must be turned around for exports, the source said, clarifying a July 22 rule that said a fifth of the shipments must be used for exports.

Banks and other importers had halted imports as there was no clarity on how the rule would be implemented. The resulting impasse over imports crimped supply and pushed up domestic prices.

India's current account deficit hit an all-time high in 2012/13 and the rupee hit a record low last month. Gold is the most expensive non-essential item in India's import bill.

(Reporting by Anurag Kotoky & Mayank Bhardwaj; writing by Siddesh Mayenkar; Editing by Himani Sarkar)