The Indian government has further tightened gold import regulations by imposing a cap of 100 kilograms on the advance authorisation scheme for each entity. This move aims to curb the misuse of the scheme and promote the domestic gold industry.
Key Changes in Gold Import Rules
The new rule restricts the quantity of gold that can be imported under the advance authorisation scheme to 100 kg per financial year per importer. Previously, there was no such limit, which allowed some entities to import large quantities of gold without proper oversight.
Impact on Importers
This decision is expected to affect small and medium-sized gold importers who relied on the advance authorisation scheme for their business. The cap is designed to ensure that the scheme is used for its intended purpose—export promotion—rather than for speculative or domestic sales.
Government's Rationale
The government has been tightening gold import norms over the past few years to reduce the current account deficit and curb illegal imports. The advance authorisation scheme allows duty-free import of gold for exporters, but it was being misused by some entities to import gold for domestic consumption.
Reactions from Industry
The gem and jewellery industry has expressed mixed reactions. While some see it as a step to bring transparency, others fear it may disrupt supply chains and increase costs for small exporters. The government has assured that the cap will be reviewed periodically based on industry feedback.
This move is part of a broader strategy to regulate gold imports, which have a significant impact on India's trade balance. The country is one of the largest consumers of gold, and any changes in import policy are closely watched by global markets.
