India's 2013 gold imports seen at 550 tonnes

India's gold imports may fall to 550 tonnes next year from a peak of 967 tonnes in 2011, the head of a leading trade body said, after a drop that could be as steep as 45 percent this year as high inflation and prices bite into disposable incomes.

India's 2011 imports put it ahead of China as the world's largest gold buyer, but they slid over 56 percent in the second quarter of this year after New Delhi hiked import duties. Overall first-half imports fell 20 percent.

"The demand (imports) for next year is expected to be about 550 tonnes (and) may drop further if there is an increase in customs duty".

He added that imports this year could be down by 42-45 percent from 2011 to around 532 tonnes.

The import duty combined with high global prices and a weak rupee, which made domestic gold even more expensive, prompted Indians to take to recycling old jewellery, leading to a slump in imports which had previously supplied most of the demand.

New Delhi wants to curb gold imports to $38 billion in the current fiscal year from $58 billion in 2011/12 as it seeks to rein in its current account deficit and encourage money tied up in gold back into the economy.