In April 2013, gold jewellery exports stood at USD 527 million.
However, the total gems and jewellery exports dipped 16 per cent to USD 2.48 billion in the first month of the current fiscal.
In order to contain current account deficit, government has increased gold import duty to 10 per cent. This move saw the gems and jewellery exports declining.
According to industry experts, the recent decision of the Reserve Bank to allow more banks to import gold has helped in enhancing the availability of gold and raw material for jewellery in the domestic market.
In March, the RBI had allowed more banks, including Axis Bank and Kotak Mahindra Bank, to import gold under the 80:20 scheme, a move seen as a precursor to easing restrictions on inward shipments of the metal.
The government and the RBI had imposed tough measures to control gold imports, one of the primary causes of the current account deficit (CAD) swelling to a record high USD 88.2 billion in 2012-13.
The government had also increased customs duty on gold to 10 per cent from 4 per cent to discourage imports.
Gold imports declined over 74 per cent to USD 1.75 billion in April due to restrictions imposed by the government on inbound shipments of the precious metal to narrow CAD.
India's CAD, which is the excess of foreign exchange outflows over inflows, touched a historic high of 4.8 per cent of GDP in 2012-13, mainly due to rising imports of petroleum products and gold.
A high CAD puts pressure on the rupee, which in turn makes imports expensive and fuels inflation.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry. The Commerce and Industry Ministry is pitching for easing of the gold import restrictions to boost gems and jewellery exports.