DGFT tightens gold import rules after government raises import duty to 15%

Directorate General of Foreign Trade has introduced stricter compliance and monitoring norms for gold imports under the Advance Authorisation scheme, a day after the government raised gold import duty to 15%.

In a public notice issued from Vanijya Bhawan, the Directorate General of Foreign Trade (DGFT) inserted five new notes under Standard Input Output Norms (SIONs) M-1 to M-8 related to the gems and jewellery sector, with immediate effect.

Under the revised framework, Advance Authorisation for import of gold will now be issued subject to a maximum permissible quantity limit of 100 kilograms.

The DGFT has also mandated physical inspection of manufacturing facilities for first-time applicants seeking Advance Authorisation. The inspection will be carried out by the concerned regional authority to verify the existence, operational status and manufacturing capacity of the applicant.

Further tightening compliance norms, the notification stated that any subsequent Advance Authorisation for gold imports will only be issued after fulfilment of at least 50% of the export obligation prescribed under previous authorisations.

The new rules also require Advance Authorisation holders to submit fortnightly performance reports certified by an independent Chartered Accountant, detailing gold imports and exports undertaken under the scheme.

Additionally, regional authorities will now have to submit consolidated monthly reports to DGFT headquarters containing details of authorisations issued and corresponding import-export transactions involving gold.

The move comes just a day after the government sharply increased import duty on gold to 15%, a step aimed at curbing excessive imports and managing the country’s trade deficit amid elevated global gold prices and strong domestic demand.

Market participants believe the latest measures indicate the government’s intent to strengthen oversight of gold imports, particularly under export-linked schemes, while preventing misuse of duty benefits.

India remains one of the world’s largest gold consumers, and changes in import duty structures and compliance mechanisms often have a significant impact on the gems and jewellery industry, bullion trade and current account dynamics.

Disclaimer: This article is for informational purposes only and should not be construed as investment advice.