Gold demand in India fell 26% in Q1 to 190.3 tons as government restrictions directly affected gold demand in the world’s most populous nation.

In 2013, the Indian government introduced a number of measures to reduce the amount of gold imported into the country in an attempt to narrow the country’s current account deficit and protect the value of the rupee.

Following Friday’s election of the pro-business party, Bharatiya Janata, the gold import restrictions are now expected to be lifted.

According to the World Gold Council (WGC), “the country remains a source of strong latent demand, which will be unleashed as and when the government restrictions are relaxed.”

The spot price of gold rose $10 per ounce yesterday on speculation the new Indian government will remove the restrictions. The WGC is forecasting total demand in India to be in the region of 900-1,000 tonnes in 2014.