The government limits the importation of certain gold goods

13 Jul 2023 , 10:13 AM

On Wednesday, the Indian government implemented restrictions on the importation of certain gold jewellery and objects. The Directorate General of Foreign Trade (DGFT) issued a notification changing the import status of unstudded gold jewellery and other gold-containing items from ‘free’ to ‘restricted’.

Under the new restrictions, a government license will be required to import these specific items, except for those covered under the tariff rate quota (TRQ) of the Comprehensive Economic Partnership Agreement (CEPA) between India and the United Arab Emirates. The DGFT clarified that imports covered by the current India-UAE CEPA TRQ will be permitted freely without an import license.

Insiders in the industry have indicated that these limits were imposed due to an increase in imports from Indonesia under the India-ASEAN free trade agreement. Gold items were being imported duty-free and melted in India to produce jewellery.

In April and May of the current fiscal year, India imported these restricted goods worth $112.09 million, with $76.28 million coming from Indonesia.

Imported gold is subject to a 15% duty, and the new restrictions aim to curb the influx of duty-free gold being processed in India.

During the same period, imports of pearls, precious, and semi-precious stones decreased by 25.36% to approximately $4 billion. Gold imports also saw a significant decline of over 40% to $4.7 billion in April and May of this fiscal year.

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