Latest information released has shown that the demand for gold has risen 41 per cent in India due to strong demand for the shiny metal from retail buyers even as the commodity recorded a strong increase in prices globally.

World Gold Council (WGC) data showed that the demand for gold increased 41 per cent to 262 tonnes during the third quarter from October to December, 2012. The country had recorded total demand for gold at 185.5 tonnes in the same quarter of the previous year. The demand strengthened in the country even as the prices of gold remained high.

The high demand is a concern for the finance ministry, which is aiming to limit the import of the shiny metal into the country in order to control the current account deficit. The finance ministry and the country's central bank, the Reserve Bank of India (RBI) have said that gold import is a key concern and the government is planning to increase the import duty to 6 per cent.

Industry players have said that the increase of 50 per cent in the import duty will deter small and marginal consumers from buying gold in the country. The high demand in the country is mainly from a combination of retail and urban consumers and the country has remained the largest market for gold and it has also emerged as the fastest growing market.