Analysts, however, say the move would not have any impact in curbing demand for gold.
"India has traditionally been a gold-crazy nation and consumers buy gold for social and emotional reasons and a duty hike would not address the issue," Vikrant Gugnani, chief executive officer, broking and distribution business, Reliance Capital, told HT.
The sharp increase in gold import is a cause of concern and the government could announce a import duty hike soon, said a senior finance ministry official.
India is second only to China in consumption of gold while the country's import bill for the yellow metal is also only next to the petroleum bill.
"We would need to look at ways to curb the import of gold as that is adding huge pressure on our fiscal health," said the official.