NEW DELHI(BullionStreet): Indian government's efforts to control gold imports and the overall hunger for gold by majority of it's population suffered a setback as imports surged on the first week of this year.

Traders have imported between 25-30 metric tons in the past one week compared to five to seven metric tons in the previous few weeks, said Prithviraj Kothari, managing director of Ridhi Sidhi Bullion Ltd.

Analysts attributed the sudden rise in gold imports to brisk buying by traders as they rushed to place orders ahead of an expected rise in the import tax.

Some analysts however said the government should have increased the tax instead of making an informal announcement beforehand, which has caused a rush to import such large amounts of gold. This rise in imports may further strain the government's attempt to reduce the current account deficit.

They added that the proposed plans to curb gold imports are to face stiff opposition from gold traders and general public alike as for them gold is a purchase of choice whenever there is a little surplus money available.

They believe gold to be the ultimate store of value and currently 70 percent of the Indian gold demand is driven by rural areas. There is need for social communication.

India is considering to raise gold import taxes to 6% as gold imports are proving to be unsustainable and trade deficit of the country is rising alarmingly high and could just as well face problems in meeting the external obligations.

Gold is India's second-largest imported commodity by value, behind crude oil. The country imported about $60 billion worth of gold in the fiscal year through March 2012, compared with about $40 billion in the previous year.