Much to the Reserve Bank of India's frustration, Indians continued to buy huge amounts of gold in July, ignoring the governments pleas to curb purchases.
Data from July shows that gold and silver imports reached $2.9 billion last month, compared to $2.45 billion in June, Reuters reports.
For months now P. Chidambaram, the country's finance minister, has been implementing various rules and regulations to try and salvage India's trade balance, but apparently to no avail.
By purchasing the yellow metal importers are depleting the country's forex reserves and endangering the stability of the rupee, the government has warned.
Meanwhile, neighbouring countries have taken measures to protect their own economies. With many Indians bringing gold home from Pakistan, Nepal, Sri Lanka and Bangladesh, these governments have implemented higher import duties and strict monitoring of potential gold smuggling schemes.
But the hunger for gold may soon be a problem for another Asian giant: China is set to dethrone India as the world's largest gold importer, the World Gold Council recently announced.