"The present gold import policy is workable only for a short distance. When this policy was conceptualised it was for a limited objective...the Department of Commerce has taken a very clear decision that this policy is not sustainable in the long-run," Commerce Secretary Rajeev Kher said at an event.
He further said it needs to appropriately amended.
In order to check rising current account deficit (CAD), the government had raised import duties and the RBI had imposed curbs on import of the metal.
The government had raised the duty three times taking it to 10 per cent in August last year and also made it mandatory to export 20 per cent of the total gold imported.
Following this, gold imports came down to 19 tonnes in November from a peak of 162 tonnes in May.
The CAD, too, was brought down to 3.1 per cent in April-September of current fiscal, from 4.5 per cent in the same period last year.
Gold and silver imports declined 71.4 per cent to USD 1.63 billion in February.
Gems and jewellery exports dipped 4.18 per cent to USD 3.59 billion in February. During the 11-month period of the last fiscal, shipments declined by 7.15 per cent to USD 35.73 billion.
Last month, the RBI allowed more banks, including Axis Bank and Kotak Mahindra Bank, to import gold under the 80:20 scheme.