MUMBAI: India's gold imports in August slumped to 32.11 tn from 111.48 tn a year ago, according to data from Directorate General of Commercial Intelligence and Statistics.
Prices of gold jumped more than 26% in May-Aug due to a weak rupee and a surge in global prices, which hit demand for the metal. The unexpected hike in import duty on gold to 12.5% from 10.0% in July and floods in various parts of India also affected demand last month.
Prices of gold in Mumbai's spot markets hit a record high of 38,961 rupees per 10 gm in August.
"The gold price in Indian rupees had surged to a record high in August, which presumably deterred Indian consumers from buying gold. Generally speaking, Indians are highly price-sensitive," Commerzbank AG said in a report.
In value terms, gold imports in August were at $1.36 bln compared with $3.64 bln a year ago.
Imports of silver rose to a staggering 542.22 tn in August from 316.39 tn a year ago. In value terms, they were up 76% at $277.06 mln.
For Apr-Aug, India's gold imports fell 12% on year to 393.22 tn, while silver imports rose 25% to 3,814.09 tn.
Jewellers are pinning their hopes on Navratri, which begins on Sep 29, followed by Dussehra and Diwali in October, for a revival in demand, said Bachhraj Bamalwa, owner of Kolkata-based jewellery store Nemichand Bamalwa and Sons.