The government has imposed a cap of 100 kilograms on gold imports under the Advance Authorisation scheme and introduced stricter compliance and monitoring norms for importers in the gems and jewellery sector. This move was announced through a notification issued by the Directorate General of Foreign Trade (DGFT) on Thursday.
Key Provisions of the Notification
The DGFT inserted five new notes under Standard Input Output Norms (SIONS) M-1 to M-8 of the Handbook of Procedures 2023, effective immediately. The notification states that Advance Authorisation for gold import shall be issued subject to a maximum permissible quantity limit of 100 kilograms.
Stricter Checks for First-Time Applicants
First-time applicants seeking permission to import gold under the scheme will now face mandatory physical inspections. The concerned regional authority will verify the existence, capacity, and operational status of the applicant's manufacturing facility before approving the authorisation.
Linking Future Approvals to Export Performance
The government has also linked future import approvals to export performance. Any subsequent Advance Authorisation for gold import will be considered only upon fulfilment of at least 50% of the export obligation prescribed under preceding Advance Authorisations for gold.
Enhanced Reporting Requirements
Advance Authorisation holders must now submit fortnightly performance reports certified by an independent chartered accountant. These reports will detail gold imports and exports undertaken under the authorisation. Additionally, regional authorities will submit monthly consolidated reports to DGFT headquarters, containing details of authorisation issuance and corresponding gold import-export transactions.
Background and Context
The Advance Authorisation scheme allows duty-free import of inputs used for export products and is widely utilised by exporters in the gems and jewellery sector. This latest restriction comes a day after the government raised import duties on gold and silver to 15% from 6% as part of efforts to curb non-essential imports and ease pressure on foreign exchange reserves amid elevated crude oil prices and global uncertainty.
India imports nearly all of its gold requirement, making bullion purchases a major contributor to the country's import bill during periods of high demand and rising prices. The government had also recently imposed a 3% Integrated GST (IGST) on gold and silver imports, a move that temporarily disrupted imports by banks and contributed to a sharp fall in bullion shipments in April.
