Gold imports rose by 10.47% to $2.42 billion in May on declining prices and easing of restrictions by RBI. Imports of the precious metal stood at $2.19 billion in the same month of 2014. In April this year, the imports grew by 78.33% to $3.13 billion.
Any increase in gold imports impacts the current account deficit (CAD). CAD in the first half of last fiscal declined to 1.9% of GDP ($18 billion) from 3.1 %( $27 billion) in the same period of the previous year.
The Reserve Bank and the government have maintained that the CAD level is comfortable, but the jump in gold imports may spark fresh worries. In November last year, RBI had scrapped the controversial 80:20 scheme. Under the programme, which was put in place in August 2013 to keep a tight leash on gold inflows, at least 20% of imported gold had to be exported before bringing in new lots.