Both have already tried quite a few tricks.
The finance ministry has increased gold import duty to six per cent - five times more from just the one percentage point importers paid last January.
RBI has asked banks to reduce lending to gold loan companies. But imports, at 604 tonnes till September in the year, have continued.
More recently, the government has changed tack.
Now it wants to limit imports by asking gold exchange traded funds (ETFs) that hold Rs 11600 crore of gold (around 35-40 tonnes) to deposit part of it with banks.
The banks, in turn, will lend it to jewellers.
According to a government note, banks will pay a nominal fee to mutual fund houses to keep gold.
This will improve the gold returns by 50-100 basis points.