Editor’s Note
**Editor’s Note:** India has tightened import controls on gold, silver, and platinum jewelry, now requiring mandatory government approval and a license from the Directorate General of Foreign Trade (DGFT). The rule applies even to existing contracts and advance payments, signaling a significant shift in trade policy.
The direct implication of this new rule is that no trader or company can now import gold, silver, or platinum jewelry from abroad without government permission. Obtaining a special license or prior approval from the DGFT will now be mandatory for importing these items. The restriction is so stringent that the government has clarified that even if a trader has an existing contract or has made advance payments, they must comply with the new regulations and obtain a license.
The primary reason behind this government move is to curb the alleged misuse of Free Trade Agreements (FTAs). According to industry sources, some importers were exploiting the agreement between India and ASEAN countries. They were bringing large quantities of precious metals into India at low duties from countries like Thailand and Indonesia, under the guise of plain jewelry without any gemstones. This was not only causing a loss of government revenue but also subjecting domestic jewelry manufacturers to unfair competition.
However, the government has considered export-promoting units. Companies operating as 100% Export-Oriented Units (EOUs) and those in Special Economic Zones (SEZs) are exempt from this ban. Additionally, imports made under ‘Gem & Jewelry Export Promotion Schemes’ will also not be subject to this restriction.
Market experts believe that this step may cause some short-term fluctuation in domestic gold and silver prices, but in the long run, it will be beneficial for the Indian jewelry industry. Industry officials have stated that the government should now simplify and make the licensing process transparent so that genuine and honest traders do not face any difficulties in conducting their business.
