Until then, the rule had been that such firms could only import gold under the condition that all of it would be exported (after converting it to jewellery). The change resulted in a spike in gold imports. In the six months between June 1 and November 30, 2014, gold imports rose to 553 tonnes. The objective of the August notification was to restrict import of gold for use in the domestic market, and, thereby, contain India’s swelling current account deficit. The NDA subsequently (towards the end of 2014) scrapped the August, 2014 change.

Source: Hindustan Times March 09, 2018 01:41 UTC