Great strictness on gold import
After increasing the import duty on gold from 6 percent to 15 percent yesterday, the government has now taken a very strict step. The Directorate General of Foreign Trade (DGFT) has significantly tightened the rules for sourcing duty-free gold for gems and jewelery exporters. The direct objective of this decision is to control the ever increasing import bill of the country. When it will be expensive and difficult for big businessmen to import gold from abroad, it is sure to have a direct impact on the supply of gold and the prices of jewelery in the local market.
Under the new rules, now only a maximum of 100 kg of gold can be imported on any one license under the Advance Authorization (AA) scheme. DGFT has implemented five new compliance rules for Gems and Jewelery Product Group with immediate effect. If a businessman is applying for an import license for the first time, the concerned regional officer will first conduct a physical inspection of his manufacturing unit. The officials themselves will go and check whether the factory actually exists or not, what is its capacity and whether production is taking place there or not. Only after this the import will be approved.
The path for those businessmen who are already taking advantage of this scheme is also not going to be easy. Any old exporter will be given a new license only when he fulfills at least 50 percent of the export obligation fixed under his previous license. This rule has been brought so that traders continue to follow the rules and are not burdened with old exports. Apart from this, exporters will have to submit a report every 15 days. It will be necessary to get this report certified by an independent Chartered Accountant (CA), in which complete accounts of gold imported and exported will have to be given. Regional officers will send all this data to the DGFT headquarters every month, so that the entire process can be monitored at the central level.
The real reason behind this strictness of the government is the record breaking import figures. India's gold imports jumped by more than 24 percent to its all-time high of $71.98 billion in the financial year 2025-26. Although the quantity of imported gold had declined by 4.76 percent to 721.03 tonnes during this period, the country's bill increased significantly due to the huge rise in international prices. According to statistics, India buys about 40 percent of its total gold requirement from Switzerland alone. This is followed by UAE (16 percent) and South Africa (10 percent). The government is continuously tightening the rules to stop the country's money from going out.
Due to these quick decisions of the government, the concerns of the people associated with the jewelery business have increased considerably. All India Gems and Jewelery Council has given its reaction on these new restrictions and increase in import duty. The Council has given a clear warning that this sudden change may lead to the growth of a 'grey market' in the market. In order to avoid heavy taxes, there is a danger of increasing smuggling of gold. If this happens, then customers will also have to be more cautious than before about its purity and billing while buying jewellery.
