Editor’s Note
This article outlines recent changes to India’s import duties on silver. The duty on silver bullion has been significantly reduced to 6%, while the levy on finished silver jewellery remains higher at 20%. This dual approach aims to lower costs for domestic manufacturers while protecting them from cheaper imported finished goods.
Under the revised duty structure, silver bullion now attracts a 6% import duty, down from 15%, while silver jewellery and parts (HSN 7113) face a 20% duty, reduced from 25%. The lower rate on bullion is expected to make raw silver more affordable for industrial and jewelry manufacturing use, while higher duties on finished jewelry protect local producers from underpriced imports.
Despite the duty cut, the import of plain silver jewellery and unmounted silver remains restricted until March 31, 2026. Importers must obtain a government-issued license to bring in these items. The restrictions follow a surge in imports falsely declared under free trade agreements and are intended to protect Indian manufacturers and preserve employment in the jewelry sector.
However, the government has clarified that these restrictions will not apply to 100% Export Oriented Units (EOUs) and Special Economic Zone (SEZ) entities. Such units can continue importing silver jewelry without restrictions, as long as the goods are not sold in the Domestic Tariff Area (DTA).
Additionally, imports made under the Advance Authorisation and Duty-Free Import Authorisation (DFIA) schemes have been exempted from the curbs. These schemes permit duty-free import of raw materials used in producing export goods, ensuring India’s export-linked manufacturing remains unaffected. The clarification underscores the government’s intent to maintain export competitiveness while regulating overall imports to manage the trade balance and domestic supply.
Passengers returning to India can import up to 10 kg of silver, but no duty-free allowance is permitted. Eligible passengers—those of Indian origin or holding a valid passport with at least six months’ stay abroad—can import silver by paying 6% duty, while non-eligible travelers face 36% duty. The tariff value, which determines the payable amount, is notified regularly by Indian Customs, and duties must be paid in convertible foreign currency.
The duty cut is expected to make silver bullion cheaper, lowering input costs for jewelry manufacturers and traders. Consumers may benefit from slightly reduced silver jewelry prices, though temporary volatility is possible as restrictions constrain finished jewelry imports.
For lenders and NBFCs offering silver-backed loans, cheaper bullion could enhance liquidity but might also affect the valuation of jewelry collateral in the short term. Once imports normalise, smoother financing and better price discovery are expected in the silver market.
Experts believe that the dual approach—lower import duties but tighter jewelry controls—will stabilise prices while supporting domestic value addition. The exemption for SEZs and EOUs ensures India’s silver export chain remains unaffected.