Indian Government Implements Restrictions on Gold Imports

The Directorate General of Foreign Trade (DGFT), Department of Commerce, Ministry of Commerce & Industry, has announced amendments to the import policy and policy conditions for certain categories of gold in India. The notification dated 12th July 2023, published in the Gazette of India Extraordinary Part – II, Section-3, Sub-Section (ii), signifies a shift from “Free” to “Restricted” import status for specific HS codes related to gold.

Under the revised regulations, HS code 71131911, which pertains to unstudded gold, will be subject to restrictions on imports. However, a significant exception has been made for importers operating under a valid India-UAE Comprehensive Economic Partnership Agreement (CEPA) Tariff Rate Quota (TRQ). Such importers will be allowed to bring in unstudded gold freely, without the requirement of an import licence.

Commenting on the amendments in the gold import policy, Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC), noted, “We acknowledge the Indian government’s decision to implement restrictions on certain categories of gold imports. While this move aims to regulate the inflow of gold, we understand that it may have implications for businesses involved in the gold trade. As an industry, we will closely monitor the impact of these changes and work with the relevant authorities to ensure that jewellery exports stay robust.”

The other affected HS codes are 71131919 and 71141910, covering other forms of gold and articles respectively. These categories will also now fall under the “Restricted” import policy.

These amendments to the import policy and policy conditions for gold, as stipulated in Chapter 71 of Schedule – I (Import Policy) of ITC (HS) 2022, come into effect immediately.

Colin Shah, MD, Kama Jewelry and Former Chairman of GJEPC, stated, “The government has curbed imports of gold with specific riders. Imports of gold affect the trade deficit negatively. The latest trade at $22 billion was the highest in 5 months. The reduced gold imports will help balance the same. Heavy gold imports also impact the Indian Rupee. Gold imports from UAE are allowed under CEPA to boost trade relations under the pact. Imports from UAE have been dismal despite the pact. Though the steps by the government is to balance the macroeconomics. Gold, as a raw material, should be available at reasonable prices for the gems & jewellery industry to maintain the competitive edge for exports.”

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