"Both the government and the Reserve Bank have taken a slew of measures to curb gold demand and the results are visible as imports till October have totalled about 400 tonnes.
"Going by the trend, we expect another 100 tonnes to be imported in the five months through March 2014. So we will end the year at about 500 tonnes," a revenue official said.
India imported an estimated 835 tonnes of gold in 2012-13, a key reason for the record current account deficit (CAD) of USD 88.2 billion, or 4.8 per cent of GDP.
The CAD -- the excess of foreign exchange outflows over inflows -- was among the factors that put pressure on the rupee, which dropped to a lifetime low of 68.85 against the dollar in late August. The local currency has since recovered and closed at 63.11 against the dollar on November 14.
As part of the steps to curb gold demand, the government raised import duty on the metal to 10 per cent and the Reserve Bank of India imposed several conditions on imports by banks. Inward shipments of gold were linked to exports.
Gold imports have fallen from 142 tonnes in April and 162 tonnes in May. They were at 23.5 tonnes in October, compared with 11.16 tonnes in September, 3.38 tonnes in August and 47.75 tonnes in July.
Reserve Bank Governor Raghuram Rajan said last week that India's CAD is likely to be less than USD 56 billion.
"Our estimate is that the CAD for this year will be about USD 56 billion, less than 3 per cent of GDP and USD 32 billion less than last year," he said.
One worry, he said, was whether gold was being smuggled and being paid for through the havala channel.
"While we do see a sizable increase in seizures, we believe gold smuggling has increased from a low base and is still small," he said.
In 2011-12, gold imports rose to 1,067 tonnes from 970 tonnes in the previous financial year.