Editor’s Note
This article discusses recent import restrictions on precious metals in India. The government’s notification, effective May 19, has amended HS codes, placing silver and platinum under import controls alongside gold.
The government has also imposed restrictions on the import of silver and platinum along with gold. In this regard, the Directorate General of Foreign Trade (DGFT) issued a notification on May 19, which became effective immediately. This notification has made amendments to the Harmonized System (HS) codes. Some codes have been ‘deleted’ while others have been placed in the ‘restricted’ category.
In the budget, separate HS codes were announced for silver with 99.9% or higher purity, gold with 99.5% or higher purity, and platinum with 99% or higher purity, so that their imports could be regulated. This DGFT notification is in accordance with the Finance Act 2025.
India had signed the agreement (CEPA) with the UAE in March 2022. Under this, only 1% duty is levied on alloy imports, while a 5% duty has to be paid on gold imports. Platinum alloy was allowed to contain 2% platinum and the remaining 98% gold.
The price of gold increased more rapidly compared to platinum. In January 2022, the price of platinum was around Rs 2300 per gram. At that time, gold was around Rs 5500 per gram. Currently, the price of platinum is approximately Rs 2700 per gram, while the price of gold is close to Rs 9000.
Some traders started importing significant amounts of gold from Dubai in the form of platinum alloy, taking advantage of this gap in customs classification. Since it was an alloy, they only had to pay 1% duty on it. If they imported gold, they would have to pay 5% duty.
After the new HS code classification, platinum alloy mixed with 90-95% gold cannot be imported under CEPA at 1% import duty.
India imported a total of 879 tonnes of gold in 2021-22, out of which 99.76 tonnes were imported from the UAE. According to the Gems and Jewellery Export Promotion Council, the total import decreased to 795.25 tonnes in 2023-24, but imports from the UAE increased to 119.75 tonnes.
After CEPA, India’s exports of gems-jewelry to the UAE have also increased. According to the Council, India exported gems and jewelry worth $4.95 billion to the UAE in 2021-22. By the year 2023-24, this increased by 62% to over $8 billion.
