The Centre has restricted duty-free gold imports for exporters under the advance-authorisation scheme to a maximum of 100 kg per license. This move aims to prevent the diversion of imported gold into the domestic market for quick profits, amid concerns over the increasing import bill and foreign exchange reserves depletion. New norms require first-time applicants to undergo physical inspections of their manufacturing units by DGFT officials before receiving authorization.
The government has now tied fresh gold import permissions to export performance, mandating firms to fulfill at least 50% of export obligations under previous licenses to qualify for subsequent authorizations. Exporters under the AA scheme must submit fortnightly performance reports, with DGFT regional offices providing monthly updates for centralized oversight of gold imports and exports. These measures aim to enhance monitoring of duty-free gold imports for export-oriented jewelry manufacturing and prevent potential diversion into the local market.
In a related development, customs duties on gold and silver imports have been raised to 15% from the previous 6%, with platinum import duty revised upward to 15.4% from 6.4%. This duty hike is part of efforts to alleviate pressure on India’s foreign exchange reserves due to escalating oil prices amid the West Asia conflict. The revised duty structure includes a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, resulting in an effective import tax of 15%.
Prime Minister Narendra Modi recently urged citizens to refrain from non-essential gold purchases for a year and embrace austerity measures to safeguard foreign exchange reserves amid global uncertainties linked to the West Asia crisis. As one of the world’s largest gold consumers driven by jewelry, investment, and festival-related purchases, India’s duty hike holds significant implications for consumers and investors alike.
