What to make of the removal of gold import restrictions

The RBI today announced the removal of restrictions on gold imports, and the withdrawal of the “20:80” rule which dictates that 20% of gold imports must be re-exported. There are no further details or statements so far and some are speculating that the government may introduce an alternative set of import curbs shortly. The bigger picture from a macro perspective is that, even if India’s gold imports do now pick up, lower commodity prices mean that the current account deficit should remain under control.