Indians import gold worth Rs 3.41 lakh cr in FY12

At this level,gold imports are a huge burden on the balance of payments and accentuates the current account deficit.

On the other hand,it represents a massive strain on investible resources and weaning away domestic savings from gold assume importance.

India produces around two tonnes of gold a year against the imports of 900 tonnes. Being the largest importer of gold in the world,India accounts for nearly one-third of the annual demand with import bill rising from $ 4.1 billion in 2001-02 to $ 61.5 billion in 2010-11.

The trade deficit during 2011-12 stood higher at $ 184.9 billion than $ 118.7 billion during 2010-11 mainly on account of large imports of POL and gold & silver accounting for 44.4 per cent of Indias imports, the RBI said.

According to an Assocham study,the government should strictly monitor in the inflows with higher customs duty.