The RBI's 80:20 scheme for gold imports had left many confused, leading to imports being held up at customs. Gold and silver imports in October was high due to the confusion over 80:20 issue, commerce secretary SR Rao said.
During the first seven months of this fiscal, however, gold and silver imports declined by 12.86% to $24 billion from $28 billion in the same period last year.
The inbound shipments grew mainly due to the festival season and clearing of air on a RBI norm for gold imports.
Increase in the gold and silver imports have pushed the trade deficit to $10.5 billion in October, the second lowest during the year, from $6.76 billion in September 2013. But the trade gap is low as compared to October 2012 when it was $20.2 billion. The current account deficit (CAD) touched a historic high of 4.8% of GDP in the last fiscal. The rise in CAD was attributed to high imports of gold and petroleum products.
The high level of CAD puts pressure on the rupee, which has depreciated by about 15% since April 30. The government had recently hiked import duty on gold for the third time in a year and also banned imports of gold coins and medallions. Further, the RBI restricted import of gold to a consignment basis by banks.