The amount of gold jewellery the country exports now directly impacts gold imports by the world's biggest buyer of bullion as the government tries to curb a bulging current account deficit.
Exports fell in August to $561 million, the Gems and Jewellery Export Promotion Council said in a statement, after a fall of 70% in July to $441.4 million.
Efforts to stem buying of gold, the second-biggest item in its import bill, include a rule that 20% of all imports must be turned around and sold for export as jewellery.
But confusion over how the rule would work had virtually stopped imports since the end of July. They are expected to resume soon after a high-level meeting of government officials last week to clarify the rules.
India shipped $2.68 billion worth of gold jewellery in value terms from April to August, down 59.4% on year.