India has implemented stricter oversight on silver imports by moving certain categories of the precious metal from the “free” import policy to the “restricted” category. This shift, outlined in a recent government notification, mandates that imports of specific silver products like bars with 99.9% purity, unwrought silver, semi-manufactured silver, and silver powder must now receive prior government approval before entering the country. The changes, effective immediately, also subject some imports to Reserve Bank of India (RBI) regulations, imposing more stringent financial compliance obligations on importers.
The revised framework signifies a significant tightening of control over the silver supply chain, encompassing various products utilized in industrial, manufacturing, and investment sectors. Previously, most of these categories were imported under the “free” regime, entailing standard regulatory clearances and minimal restrictions. However, with the latest notification, importers are now obligated to obtain explicit approval from authorities prior to importing bullion-grade silver and semi-processed silver products. This measure is perceived by industry observers as a means to enhance monitoring of precious metal inflows and restrict excessive imports.
These new restrictions align with the government’s broader efforts to alleviate pressure on India’s import bill and enhance supervision of precious metals trade. Notably, the government had earlier raised import duties on gold and silver from 6% to 15%. Concurrently, the Directorate General of Foreign Trade (DGFT) has tightened regulations governing duty-free gold imports under the Advance Authorisation (AA) scheme utilized by gems and jewellery exporters. Under the updated norms, gold imports under the AA scheme are now capped at 100 kilograms per license, with initial applicants required to undergo physical inspections of manufacturing facilities before approvals are granted.
Furthermore, the DGFT has introduced more stringent compliance measures for repeat applicants, including heightened export obligation conditions and increased reporting obligations backed by chartered accountant certifications. The recent restrictions on silver imports are anticipated to enhance regulatory oversight within the precious metals sector, potentially impacting bullion traders, jewellery manufacturers, and industrial users reliant on imported silver supplies.
