India is likely to see an increase in its gold imports by 11% to 1,000 tonnes this year, even as the Narendra Modi government tries to curb the metal's import with gold schemes.

The rise in gold imports is mainly due to a sharp decline in the metal's prices in overseas markets driven by a strong US dollar.

India, the world's second-largest consumer of gold, had imported 900 tonnes of the metal in the last calendar year, 2014, said a trade body.

"Gold import is estimated at around 1,000 tonnes in 2015 calendar year, compared to around 900 tonnes last year. Imports are likely to increase because of low global prices," PTI quoted All India Gems and Jewellery Trade Federation Chairman G V Sreedhar a saying.

Sreedhar said gold imports through smuggling are pegged at nearly 100 tonnes this year.

India's gold imports have already reached 850 tonnes in January-September of 2015, compared to 650 tonnes in the same period last year, said the federation.

Despite a sharp decline in gold prices, the demand for the metal is expected to touch an eight-year low in the December quarter, as consecutive droughts have hit the income of farmers in rural India. The slowdown in demand is likely to halve the country's gold imports in US dollar terms in the quarter.

Gold imports are estimated to touch 150-200 tonnes in the October-December quarter this year against 300 tonnes in the corresponding quarter a year earlier.

A third of gold purchases in the country happens in the December quarter due to seasonal demand. With two-thirds of such demand coming from rural areas, a weak monsoon for the second consecutive year due to occurrence of El Nino has weighed on the earnings of farmers, leading to a dip in purchase of gold.

After starting on a promising note in June this year, monsoon rainfall weakened from late July due to the El Nino effect and ended in deficit for the second straight year.

"Lingering concerns over the health of the rural Indian economy and local gold prices remaining in close proximity to Rs 27,000 per 10 grams level in recent weeks also give reasons to adopt a prudent outlook for the usual fourth quarter uplift in Indian demand," the World Gold Council had said in the report.

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