The government said on Tuesday the recent steps to curb gold import is showing results as demand for foreign exchange to buy gold has come down significantly.
"In last 5 -7 days, the large foreign exchange for purchase of (gold) has come down considerably.
“It has come down from peak of $227 million to $7 million in (a particular) day. The average is $41 million.
"This is a major reduction in offtake for gold," Department of Economic Affairs Secretary Arvind Mayaram told reporters in New Delhi.
He further said the high current account deficit is bothering the government, but the recent steps taken to check gold demand has started showing results.
"Steps . . . taken on gold they have started showing results," Mayaram said.
Worried over huge gold demand that is impacting CAD, the government hiked the customs duty to 8 per cent while the Reserve Bank of India has put restrictions on banks to import gold.
The monthly average import in the current fiscal was 152 tonnes as against 70 tonnes in 2012-13.
The foreign currency outgo on gold import is estimated at $15 billion in the first two months of 2013-14.
India's CAD, which touched a record high of 6.7 per cent of GDP in December 2012 quarter, is likely to be around 5 per cent during the last fiscal.
RBI has been saying that India can sustain a high CAD and ideally it should be around 2.5 per cent of the GDP.
Gold prices on Tuesday rose by Rs 227 to Rs 28,418 per 10 gm in futures trade, largely on speculative positions created by participants amid a firming trend at the spot market.
At the Multi Commodity Exchange, gold for delivery in far-month October was up by Rs 227, or 0.81 per cent, to Rs 28,418 per 10 gm in business turnover of 143 lots.