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With gold prices seeing a sharp fall in the past two weeks, imports of the commodity have surged.
Premium trading houses were said to have imported heavily during the last week of September, increasing India's gold import bill for that month to $3.5-4 billion, the highest since May 2013 ($7.6 billion), said a source.
In September 2013, the bill was $682 million.
“Ahead of the festive season, most traders and retail chains wanted to be ready with stocks and benefit from the lower prices, which has resulted in high imports," said an official of a south-based jewellery retailer.
In June this year, gold imports stood at 92 tonnes; the import bill was $3.12 billion.
However, traders and retail chains said the demand for gold was subdued last week. 
Prithviraj Kothari, director, RiddhiSiddhi Bullions, said, "There hasn't been any significant increase in demand for gold to explain the huge jump in import, as is being talked about."
He added in October, imports could stand at about 80 tonnes.
An official of a jewellery retail chain said imports seemed to have risen as jewellers wanted to be ready with stocks if demand suddenly increased due to low prices.
Gold prices are much lower compared to a year ago. Since the beginning of September, prices have corrected six per cent to $1,216 an ounce in global markets.
In the market here, gold closed at Rs 27,250/10g on Wednesday, against Rs 30,150/10g a year earlier.
For the April-August period this year, the gold import bill was $10.9 billion.
For the entire financial year, the bill is estimated at about $35 billion.
The premium for physical delivery is being quoted at $16 an ounce. Last week, this had exceeded $20.
The increase in imports, and consequently supplies, are keeping premia under check.
