India had imported gold and silver worth USD 61.5 billion in 2011-12 fiscal - an increase of 44 per cent year-on-year, exerting pressure on the country's balance of trade situation.
For the 2011 calendar, the country imported 967 tonnes of gold in 2011. "The main reason behind the decline in imports was the proposal of excise duty which led to almost no manufacturing and buying.
Whatever small quantity of manufacturing took place, jewellers used their existing inventory and they did not buy any new stocks that led to very little import," Bombay Bullion Association President Prithiviraj Kothari said.
Bullion traders and jewelleres were on 21-day strike starting March 17 protesting against the budget proposal of excise duty on unbranded jewellery.
The massive opposition forced the government to withdraw excise duty on both branded and unbranded jewelleries. Kothari said the trend would continue in May as demand for precious metals would be even less as marriage season is nearing its end. However, the demand would pick up from August onward.
"The gold import is likely to decline by more than 40 per cent in May compared to the same month last year, in which more than 100 tonne was imported," he added.
Rupee depreciation also resulted in high landed cost, impacting the domestic demand, JRG Wealth Securities Vice President and Research Head Harish Galipelli said.