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Centre Caps Duty-Free Gold Imports at 100 kg Per Licence to Curb Diversion

The Centre has capped duty-free gold imports at 100 kg per licence under the advance-authorisation scheme to prevent diversion into the domestic market. New norms include mandatory physical inspection of manufacturing units for first-time applicants and linking fresh permissions to 50% export performance. The government also raised customs duties on gold and silver to 15% to curb imports and protect foreign exchange reserves amid global uncertainty. Prime Minister Narendra Modi urged citizens to avoid non-essential gold purchases for a year to support macroeconomic stability.

Key Points: Centre Caps Duty-Free Gold Imports at 100 kg Per Licence

  • Duty-free gold imports capped at 100 kg per licence
  • First-time applicants face mandatory unit inspection
  • Exporters must fulfil 50% export obligations for new licences
  • Customs duty on gold hiked to 15% from 6%
2 min read

Centre caps duty-free gold imports by exporters

Govt limits duty-free gold imports to 100 kg per licence, hikes customs duty to 15%, and tightens norms to curb diversion and save forex reserves.

"The measure is aimed at strengthening scrutiny of duty-free gold imports meant for export-oriented jewellery manufacturing and preventing possible diversion into the domestic market. - Government statement"

New Delhi, May 14

The Centre has imposed a limit on duty-free gold imports under the advance-authorisation scheme for exporters at a maximum of 100 kg per licence in a move aimed at curbing diversion of imported gold into the domestic market to make a fast buck amid concerns over the soaring import bill, which is draining precious foreign exchange reserves.

Under the revised norms issued by the Directorate General of Foreign Trade, first-time applicants seeking permission to import gold will now undergo mandatory physical inspection of their manufacturing units by DGFT officials before authorisation is granted.

The government has also linked fresh gold import permissions to export performance, making it mandatory for firms to fulfil at least 50 per cent of export obligations under earlier licences before becoming eligible for subsequent authorisations.

As part of the more stringent monitoring, exporters importing gold under the AA scheme will now have to submit fortnightly performance reports, while DGFT regional offices have been directed to send monthly updates to headquarters for centralised oversight of gold imports and exports.

The measure is aimed at strengthening scrutiny of duty-free gold imports meant for export-oriented jewellery manufacturing and preventing possible diversion into the domestic market.

Meanwhile, the government on Wednesday raised customs duties on gold and silver imports to 15 per cent from the previous 6 per cent, while platinum import duty was revised upward to 15.4 per cent from 6.4 per cent, as policymakers moved to contain mounting pressure on India's foreign exchange reserves amid rising oil prices due to the West Asia conflict.

The revised duty structure comprises a 10 per cent basic customs duty along with a 5 per cent Agriculture Infrastructure and Development Cess (AIDC) on gold and silver imports, taking the effective import tax to 15 per cent. The duty hike is aimed at discouraging inbound shipments of precious metals, which remain among the key contributors to higher foreign exchange outflows, and is expected to support broader macroeconomic stability.

The move follows Prime Minister Narendra Modi's earlier appeal to citizens this month to avoid non-essential gold purchases for a year and adopt austerity measures to conserve foreign exchange reserves amid global uncertainty linked to the West Asia crisis.

India is among the world's largest consumers of gold, with demand driven largely by jewellery, investment, and festival-related purchases, making the duty hike a significant policy intervention with wide-ranging implications for consumers and investors alike.

- IANS

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Reader Comments

P
Priya S
The duty hike from 6% to 15% is steep! 😱 My wedding is next year and we were planning to buy gold. Now I'm worried about the budget. While I understand the need to protect forex reserves, common people like us who buy gold for tradition are getting squeezed. Wish there were exemptions for genuine buyers.
R
Rajesh Q
Modi ji asking people to stop buying gold for a year? Come on, that's unrealistic! Gold is part of our culture—Akshaya Tritiya, Diwali, weddings. We can't just stop. Instead of blaming citizens, why not tackle the real issue: stop the smuggling at borders and ports. That's where the real leakage is happening.
S
Siddharth J
As a small-scale jeweller, this is worrying. The fortnightly reports and mandatory inspections will slow down everything. Genuine exporters like us will suffer because of a few bad apples. But I guess better monitoring is needed. Let's hope DGFT officials don't use this to harass honest businesses. 💍
M
Michael C
Interesting move. As someone who follows global markets, India's gold imports have been a huge factor in the rupee's weakness. But a 15% duty might just push more buying into the unofficial market. I've seen similar policies in other countries backfire. Hope India's DGFT has thought this through with proper enforcement.
N
Neha E
Finally some sense! The previous system was a joke—exporters were importing gold duty-free and then selling it locally at a premium. That's not export, that's arbitrage! 👏 But I hope the government also looks at reducing the overall gold demand by promoting digital gold or gold bonds.

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