After a sharp rise in January, gold imports in February declined 29.49 per cent to USD 1.39 billion, which is expected to keep a lid on the country's current account deficit (CAD).
The sliding prices of the yellow metal in both global and domestic markets are seen as a contributory factor for the plunge.
The contraction in imports helped narrow trade deficit at USD 6.54 billion last month as against USD 6.74 billion in the year-ago period.
India is the largest importer of gold in the world and the imports mainly cater to the demand of the jewellery industry.
In July-September of the current fiscal, CAD rose to USD 8.2 billion, or 1.6 per cent of GDP, from 1.2 per cent, or USD 6.1 billion in the April-June quarter.