India's gold imports rose by about 61% to 155 tonnes in the first two months of the current fiscal mainly due to weak prices globally and the easing of restrictions by the Reserve Bank. In April-May of the last fiscal, gold imports had aggregated about 96 tonnes.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. Large imports of gold impact the country's current account deficit, which occurs when value of import of goods and services is more than its exports.
The CAD in 2014-15 reduced to 1.3% of GDP ($27.5 billion) from 1.7% ($32.4 billion) in 2013-14.The Reserve Bank and the government have maintained that the CAD level is comfortable. In 2014-15, India imported 915.54 tonnes of gold as against 661.71 tonnes in the previous financial year.