Days after raising customs duty on precious metals, including gold and silver, from 6 to 15 per cent, the Centre on Tuesday further tightened rules governing gold imports under the Advance Authorisation Scheme for the gems and jewellery sector. The government introduced stricter monitoring, compliance checks and export-linked conditions to prevent the misuse of imported gold. The new norms have been issued by the Directorate General of Foreign Trade (DGFT) under the Foreign Trade Policy-2023.
A major move formalised today is the imposition of a cap on duty-free gold imports by exporters under the scheme.
A notification issued in this regard says Advance Authorisation for gold imports will now be issued only up to a maximum permissible quantity of 100 kg. This means exporters would be allowed to import not more than 100 kg gold per licence.
The Advance Authorisation Scheme allows duty-free import of inputs, which are physically incorporated in an export product. The move is aimed at strengthening oversight of gold imports made for export-oriented jewellery manufacturing.
The government has also made physical verification mandatory for first-time applicants. According to the notification, if a company or exporter applies for advance authorisation for the first time, the regional authority concerned must conduct a physical inspection of the manufacturing facility to verify its existence, production capacity and operational status.
In another major compliance condition, the DGFT has linked fresh gold import permissions with export performance. The notification states that any subsequent advance authorisation for gold imports would be considered only after at least 50 per cent of the export obligation under the previous authorisation has been fulfilled.
The government says the condition is intended to ensure “progressive compliance and monitoring”. To tighten supervision further, the notification mandates that advance authorisation holders must submit a performance report every fortnight to the regional authority concerned. These reports must be certified by an independent chartered accountant, and should contain details of gold imports and exports carried out under the authorisation.
The regional authorities have additionally been directed to send consolidated monthly reports to the DGFT Headquarters containing details of advance authorisations issued along with corresponding import-export transactions.
The notification says this mechanism has been introduced to enable “centralised monitoring and policy oversight”. Trade observers believe the stricter norms are aimed at preventing diversion of imported gold into domestic markets, and ensuring that duty-free imports are used only for genuine export purposes. India remains one of the world’s largest gold importers, making regulatory oversight in the sector significant for trade and foreign exchange management.
