Gold imports fell by about 48 per cent to US dollar 3.90 billion in the first quarter of the current fiscal, which is expected to keep a lid on the current account deficit.
The sliding prices of the precious metal in both global and domestic markets are seen as a contributory factor for the plunge.
Gold imports stood at USD 7.51 billion in April-June 2015.
The inbound shipments contracted for a fifth consecutive month in June by 38.5 per cent to USD 1.20 billion, according to the data by the Commerce Ministry.
The contraction in imports helped narrow trade deficit to USD 8.11 billion last month as against USD 10.82 billion in June 2015.
India is one of the largest gold importers in the world and imports mainly take care of demand of jewellery industry.
India’s CAD narrowed to 1.3 per cent of GDP in the third quarter of 2015-16 as against 1.5 per cent in the same period of the previous year, mainly on account of a lower trade deficit.
Meanwhile, the government has announced launch of fourth tranche of sovereign gold bond scheme from today in a bid to check the demand for physical gold.
It had netted 3.1 tonnes of idle household and temple gold under the monetisation scheme since its launch in November.
As per the data, silver imports too dipped to USD 249.39 million in June as against USD 342.37 million in the same month last year.
Also, shipments of pearls, precious and semi-precious stones showed a decline of 13.52 per cent in June.