The RBI in July last year had imposed severe restrictions on gold imports in order to check burgeoning current account deficit and sliding rupee.
The central bank had tied imports with exports and prescribed a 20:80 formula. This facility was available to select banks only and other entities were barred from importing the metal.
"Star trading houses/premier trading houses (STH/PTH), which are registered as nominated agencies by the Director General of Foreign Trade (DGFT), may now import gold under 20:80 scheme," RBI said in a notification.
Under the 20:80 scheme an importer has to ensure that at least one-fifth, or 20 per cent, of every lot of imported gold is exclusively made available for the purpose of exports and the balance for domestic use.
The decision to ease the restriction follows representations from jewelers, bullion dealers, banks, and trade bodies.
"Taking into account such representations and in consultations with the Government of India, it has been decided to modify the guidelines for import of gold by the nominated banks/agencies/entities," the RBI said.
The revised guidelines have come into force with immediate effect.
The eligible star trading houses and premier trading houses, however will have to follow certain conditions.
As part of easing curbs, the central bank in March had allowed five more banks to import gold under 20:80 scheme.
The CAD, which had touched a record high of USD 88.2 billion or 4.8 per cent of GDP in 2012-13 is estimated to have come down to below USD 32 billion or 1.7 per cent of GDP in 2013-14.
The rupee has strengthened to sub-59 level against dollar from a high of nearly 69 in August 2013.)
Commenting on the RBI decision, the All-India Gems and Jewellery Federation (GJF) Chairman Haresh Soni said this is a positive step for the industry as supplies will increase.
It will help in reducing the domestic gold prices as this smoothening of supply will help in reducing the premiums, which currently is ruling at USD 80-90 an ounce, he said.
India is the largest importer of gold, which is mainly utilised to meet the demand of the jewellery industry.
In order to rein in CAD, the government had also increased the customs duty on gold to 10 per cent in three tranches last year.
With moderation in CAD, the incoming Narendra Modi government is likely to ease restrictions on gold imports to boost jewellery exports.
According to sources, the Revenue Department officials are looking into various aspects related to gold imports before any decision on lower import duty from the current 10 per cent.
"Can't say how much it (customs duty) will be cut. We are in discussions as the final CAD numbers of 2013-14 are yet to come," sources said.
However, they added, the final call on the reduction of customs duty on gold rests with the new Finance Minister.