NEW DELHI — The Indian government has capped duty-free gold imports under the advance authorization scheme for exporters at 100 kilograms per license, tightening oversight of a channel meant to support export-oriented jewelry manufacturing.
The move is aimed at preventing the diversion of imported gold into the domestic market, where higher prices can create incentives for quick resale. It also comes amid government concern over the country’s rising import bill and pressure on foreign exchange reserves.
Under revised rules issued by the Directorate General of Foreign Trade, first-time applicants seeking authorization to import gold will face mandatory physical inspections of their manufacturing units before approval is granted.
The government has also tied new gold import permissions to export performance. Firms must now fulfill at least 50% of their export obligations under earlier licenses before becoming eligible for additional authorizations.
Exporters importing gold under the scheme will be required to submit performance reports every two weeks. DGFT regional offices have also been directed to send monthly updates to headquarters, creating a more centralized monitoring system for gold imports and related exports.
The tighter rules are intended to strengthen scrutiny of duty-free gold imports that are supposed to be used in jewelry and other export products.
Separately, the government raised customs duties on gold and silver imports to 15% from 6%, while the import duty on platinum was increased to 15.4% from 6.4%. Policymakers said the change is intended to curb imports of precious metals at a time when higher oil prices and global uncertainty are adding pressure to India’s foreign exchange position.
The revised duty structure includes a 10% basic customs duty and a 5% Agriculture Infrastructure and Development Cess on gold and silver imports, bringing the effective import tax to 15%.
India is one of the world’s largest gold-consuming markets, with demand driven by jewelry, investment and festival-related purchases. The higher duties and tighter import controls could have significant implications for jewelers, exporters, investors and consumers. (Source: IANS)
