NEW DELHI(BullionStreet): Ruling out any chances of reduction in gold import duty, Indian finance minister P.Chidambaram said government is not considering it on gold in view of the impact it will have on the country's current account deficit.

Replying to questions in this regard in country's parliament, he said there is no such proposal under consideration to reduce the import duty on gold, taking into account the likely impact on the CAD.

Chidambaram said the domestic prices of precious metals have increased in tandem with international prices and as they are demand driven, the government has a limited role in controlling the demand.

World's largest gold consumer India's current account deficit widened to 4.2 per cent of GDP in 2011-12, and had touched a record high of 5.4 per cent during in the July-September quarter of the current fiscal.

Current account deficit is the difference between inflows and outflows of foreign currency.

India hiked the import duty on gold and platinum from 4 per cent to 6 per cent in January in an attempt to curb imports of the precious metals to check the widening CAD.

Revenue generated from import of gold in the April-January period of current fiscal stood at Rs 8,135 crore.

India had also proposed to provide link between the Gold Exchange Traded Fund (ETF) and the gold deposit scheme with an objective to release a part of gold physically held mutual funds under Gold ETF.

The last three years have seen a substantial rise in gold imports contributing significantly to the current account deficit along with oil.