Higher returns from bank deposits seem to have robbed the sheen of the yellow metal with a massive decline of above 55 per cent expected in gold imports in February.
India's gold import is likely to dip by 55 per cent to 20-25 tonne in February as compared to 45 tonne in the same month in 2010 following increase in bank deposit rates to nearly 10 per cent, Bombay Bullion Association President Prithivraj Khotari said.
"Higher food inflation and liquidity problem in the market have further affected the demand," he said.
Khotari said record gold prices during February, which almost touched Rs 21,000 per 10 grams, is also likely to have negative impact on imports. India is the world's largest consumer of gold.