Government Imposes Import Restrictions on Gold and Silver Jewelry to Prevent Misuse of Free Trade Agreements

Government Introduces Restrictions on Gold, Platinum, and Silver Jewellery Imports

The Indian government has announced a new set of restrictions on imports of gold, platinum, and silver jewellery, effective immediately. This move is aimed at preventing the misuse of free trade agreements (FTAs) by importers.

According to a notification issued by the Directorate General of Foreign Trade (DGFT), the import policy for items under Customs Tariff Heading (CTH) 7113 has been revised from 'Free' to 'Restricted'. This change affects the import of articles made from gold, silver, and platinum, which are covered under this CTH. As a result, importers of these goods will now require permission or a license from the DGFT.

The new restrictions will apply to all importers, regardless of any prior contract, irrevocable letter of credit, advance payment, shipment status, or other commitment. The benefit of transitional arrangements will not be available to importers under these circumstances. However, 100% Export Oriented Units and units located in Special Economic Zones (SEZs) will not be subject to these restrictions. Additionally, imports under the schemes for export of Gems and Jewellery will also be exempt from these restrictions.

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The government's move is a response to concerns that some importers have been misusing the India-Asean FTA to exploit duty differentials and circumvent tariffs. Industry officials have reported that some traders were using the FTA to import unstudded jewellery from countries like Thailand, which was then being resold as precious metal jewellery in India. The government aims to curb these practices by introducing stricter regulations on gold, platinum, and silver jewellery imports.