The government on Monday cut tariff value of gold for bulk imports to $539 per 10 grams from $573 per 10 grams.
For eligible passengers, the tariff value on has been raised slightly from $530 per 10 grams to $539, an official release said.
The tariff value is the base price on which the customs duty is determined.
Tariff value on bulk silver imports has also been and slashed to $1,034 per kg. For passengers, it has been cut to $1,034 per kg.
After the crude oil, gold is the most imported commodity in India in terms of value.
Bullion traders and jewellers have opposed the recent hikes in tariff value as it would hit demand as the increased costs have to be passed on to consumers.
Early this year, the government had changed the duty structure on gold and silver from specific to value-linked, making the precious metals more expensive.
The import duty on gold was fixed at 2 per cent of the value, instead of the earlier rate of Rs 300 per 10 grams. On silver, the import duty was pegged at 6 per cent, as against Rs 1,500 per kg earlier.
India, the world's biggest consumer of gold, imported 967 tonnes of gold in 2011.
Photograph: Yuriko Nakao/Reuters