In a decisive move to protect national revenue, the Indian government has clamped down on the import of specific platinum jewellery items. The new policy shifts these imports from a 'free' to a 'restricted' category, a status that will remain in effect until 30 April 2026.
The Loophole Exploited by Traders
According to the notification issued by the Directorate General of Foreign Trade (DGFT) on 17 November, the action was prompted by the misuse of a zero percent import duty clause. Until now, unstudded articles of platinum jewellery with a 90% gold content could be imported freely.
However, Surendra Mehta, National Secretary of the India Bullion and Jewellers Association (IBJA), revealed that some traders were exploiting this provision. They were importing these jewellery items at zero duty from Indonesia under the India-ASEAN free trade agreement. Once in India, the jewellery was not sold as intended. Instead, it was melted down and converted into gold bars, allowing traders to evade the standard 6% import duty applicable to gold.
Mehta emphasized that this practice was causing a massive loss to the exchequer. Consignments were reportedly landing at Amritsar and Delhi airports before being processed in this manner.
A Pattern of Regulatory Action
This is not the first time the government has taken such a step to cool down speculative investment demand and safeguard revenue. On 24 September, the commerce ministry moved silver jewellery from the free to the restricted category until the end of the current fiscal year, FY26.
Mehta explained that while the government restricted silver jewellery imports, it initially left platinum jewellery in the free category. This discrepancy was quickly noticed by a few tradesmen, who decided to exploit this new loophole, leading to the recent regulatory correction.
Market Context and Impact
The scale of this evasion becomes clearer when looking at market volumes. Chirah Sheth, a principal consultant at Metals Focus, provided context, noting that India imports only about 4-5 tonnes of platinum bars annually. This is minuscule compared to the roughly 6,000-7,000 tonnes of silver imported each year.
This regulatory action underscores the government's vigilant approach to monitoring international trade agreements and closing gaps that could be used for duty evasion. The move is expected to bring order to the bullion market and ensure that the appropriate taxes are collected on precious metal imports.
