India gold import duty: In a strategic move to safeguard its foreign exchange reserves, the Indian government has introduced a 100-kilogram ceiling on duty-free gold imports for jewellery exporters, signaling a significant tightening of the nation’s precious metal trade regulations.
The new mandate, issued on Thursday, modifies the Advance Authorisation Scheme, which previously allowed manufacturers to import gold without duty for export purposes. By capping imports per licence and introducing rigorous oversight, New Delhi aims to temper the appetite for the world’s second-largest gold consumer market while managing economic pressures from volatile global oil prices.
Tighter Reins on Jewellery Exporters
The revised framework shifts the focus from volume to accountability. Under the new rules, future import licences are no longer guaranteed; they are now strictly linked to performance, requiring exporters to fulfill at least 50% of their existing export obligations before new shipments are cleared.
For new players entering the market, the barrier to entry has become significantly steeper:
- Mandatory Physical Inspections: Regional authorities will now conduct on-site audits of manufacturing facilities for first-time applicants to verify production capacity and operational status.
- Fortnightly Compliance: Licence holders are required to submit reports every two weeks, certified by an independent chartered accountant, detailing every gram of gold imported and exported under the scheme.
The Economic Backdrop: Forex and Fiscal Pressure
This regulatory squeeze follows a sharp hike in import tariffs earlier this week, where the government raised duties on gold and silver to 15% (up from 6%). This fiscal lever is designed to reduce overseas purchases that drain foreign exchange reserves, especially as the cost of energy imports remains high.
Industry Impact and Market Performance
While the government prioritizes fiscal stability, the industry warns of a potential chilling effect on trade. A Mumbai-based exporter noted that the “excessive compliance requirements” could lead to a decline in jewellery exports, despite the sector’s strong performance in the previous year.
According to data from the Gem and Jewellery Export Promotion Council, India’s gold jewellery exports—spanning both plain and studded segments—reached a robust 11.36 billion dollar in the 2025/26 fiscal year.
As these new barriers take effect, the industry must now navigate a landscape where the cost of doing business is measured not just in bullion prices, but in the weight of regulatory paperwork.
Key Highlights at a Glance
- Regulation: New compliance framework introduced for bullion import/export licences
- Import Cap: Maximum 100 kg import allowed per licence
- Licence Renewal: Minimum 50% fulfilment of previous export obligations required
- New Applicants: Mandatory physical facility inspections before approval
- Reporting Requirement: Fortnightly certified audits by a Chartered Accountant compulsory
- Standard Duty: Import duty on gold and silver recently increased to 15%
FAQ’s
1. Why has India imposed a 100 kg cap on duty-free gold imports?
India introduced the cap to reduce excessive gold imports, protect foreign exchange reserves, and manage economic pressures caused by rising global oil prices and higher import bills.
2. What changes have been made to the Advance Authorisation Scheme?
Under the revised scheme, jewellery exporters can import a maximum of 100 kg of gold per licence, and future licences will only be granted after meeting at least 50% of existing export obligations.
3. What new compliance rules must exporters follow?
Exporters are now required to submit fortnightly reports certified by a Chartered Accountant detailing gold imports and exports. First-time applicants must also undergo physical inspections of their manufacturing facilities.
4. How much is the current import duty on gold and silver in India?
The Indian government recently increased the standard import duty on gold and silver to 15%, up from the earlier 6%, to discourage excessive imports.
5. How could these new regulations impact the jewellery industry?
Industry experts believe the stricter compliance requirements and higher duties could increase operational costs and potentially slow jewellery exports, despite India recording strong export performance in the 2025/26 fiscal year.
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