Gold imports, which have a bearing on the country's current account deficit (CAD), rose by 22.58 percent to $ 34.6 billion (about Rs 2.54 lakh crore) during 2020-21 due to increased domestic demand, according to the Commerce Ministry data.
Silver imports during the last fiscal, however, dipped by 71 percent to about $ 791 million. Imports of the yellow metal stood at $ 28.23 billion (about Rs 2 lakh crore) in 2019-20, the data showed.
Despite growth in gold imports, the country's trade deficit narrowed to $ 98.56 billion during 2020-21 as against $ 161.3 billion in 2019-20.
Gem and Jewellery Export Promotion Council (GJEPC) Chairman Colin Shah said that increasing domestic demand is pushing up imports of gold.
The demand for gold would further increase on account of the forthcoming auspicious Akshaya Tritiya and marriage season which could increase the CAD.
The CAD is the difference between inflow and outflow of foreign exchange. India's current account swung to a deficit for the first time in the current fiscal, with the gap coming at $ 1.7 billion or 0.2 percent of the GDP in the December quarter.
India is the largest importer of gold, which mainly caters to the demand of the jewellery industry. Gems and jewellery exports declined by 27.5 percent to $ 26 billion in April-March 2020-21.
In volume terms, the country imports 800-900 tonnes of gold annually.
The government in the Budget reduced the import duty on the yellow metal from 12.5 percent to 10 percent (7.5 percent customs duty plus 2.5 percent Agriculture Infrastructure and Development Cess).