RBI in discussion with government to curb surging gold imports

The surging gold import that has led India’s trade deficit in October increasing by 26.06 percent at $13.35 billion, from $10.59 billion in the corresponding month of last year and which is putting pressure on the Current Account Deficit, has made the Reserve Bank of India (RBI) to discuss the matter with the government to curb its imports.Gold has seen a sharp surge in the recent months, in October alone gold import surged almost four times to $4.17 billion from $1.09 billion same month a year ago. RBI Deputy Governor S S Mundra was reported saying that a policy relook is warranted with the surge in gold import and further view will be taken after the discussions of the RBI and the government. Gold imports have touched 150 tonnes in October, as against 24 tonnes a year ago. Worried over the rising trend in gold imports, the government last week held a meeting to discuss ways to curb the import of the precious metal. Last year in August the previous government had imposed severe restrictions on gold imports and raised import duty to 10 percent in order to check burgeoning current account deficit and sliding rupee, but in in May this year it, eased certain rules and allowed private agencies to import gold under 80:20 scheme.