MUMBAI: India's gold imports in September soared 658% from last year's lower base as a correction in local prices to the lowest level in nearly six months prompted jewellers to step up purchases for the upcoming festive season, a government source said.

Higher imports by the world's second-biggest bullion consumer could support benchmark gold prices, which have fallen nearly 15% from an all-time high of $2,072 in August 2020.

The surge in imports could increase India's trade deficit and pressure the rupee.

India imported 91 tonnes of gold in September, compared to 12 tonnes a year earlier, the source said on Monday on condition of anonymity as he is not authorised to speak to media.

In value terms, September imports surged to $5.1 billion from $601 million a year ago, he said.

India's gold imports in the September quarter surged 170% from a year ago to 288 tonnes, the government official said.

"Last month global prices were correcting, and rupee was appreciating. The combination brought down local prices significantly and allowed jewellers to stock up," said a Mumbai-based dealer with a gold importing bank.

Local gold futures fell to 45,479 rupees ($611.93) per 10 grams last week, the lowest in nearly six months.

Retail demand has been improving and jewellery stores are registering good footfall, the dealer said.

The country's gold imports in October could rise above 100 tonnes from 45 tonnes a year earlier if prices remain stable around the current level of 46,300 rupees, said a Kolkata-based bullion dealer.

"Retail consumers are now stepping out for shopping. The fear of coronavirus has been going down with a drop coronavirus cases," the dealer said.

Indian authorities imposed localised lockdowns in the June quarter as COVID-19 infections surged to a record high, but allowed businesses to reopen in a phased manner as cases fell.