NEW DELHI(BullionStreet): India wants the 20,000 tons of household gold to come into market to help reduce climbing imports, according to Finance minister P. Chidambaram.

Chidambaram said if that gold comes into circulation, the jewellers will demand less of import of gold.

He added that government’s restrictive policy on gold is aimed at moderating imports and increasing its supply by defreezing idle domestic stock.

He said the country want to unfreeze stock of gold in India and bring it back to circulation for which we announced some measures yesterday so that part of the gold stock lying unused is unfrozen and comes back into circulation.

India cannot afford to spend so much foreign exchange to import gold despite the fact that love for gold is a powerful factor in India, he said.

Chidambaram however said the government is not looking at any predetermined level of gold import.

Referring to the other measure of linking Gold Exchange Traded Fund (ETF) with Gold Deposit Schemes, Chidambaram said it is an attempt to unfreeze the gold stock and bring them back into circulation.

India also plans to link Gold ETF with gold deposit scheme as this move will enable mutual funds to unlock their physical gold held in ETF and invest in gold-deposit schemes offered by banks.

Gold prices in India have climbed by Rs 300 per grams after the announcement of hike in duty.