Daijiworld Media Network – New Delhi

New Delhi, May 15: A day after sharply increasing import duty on precious metals, the Centre on Thursday imposed a 100-kilogram limit on gold imports under the Advance Authorisation (AA) scheme, tightening norms to prevent possible misuse and regulate inflow of the precious metal.

The Advance Authorisation scheme allows jewellery exporters to import raw materials and inputs duty-free for manufacturing export products. Earlier, there was no quantitative cap on gold imports under the scheme.

In a public notice, the Directorate General of Foreign Trade (DGFT) stated that Advance Authorisation for gold imports would now be issued subject to a maximum permissible quantity of 100 kg.

The government has also introduced stricter compliance conditions for applicants. In the case of first-time applicants, mandatory physical inspection of manufacturing facilities will be conducted to verify the unit’s existence, operational status, and production capacity.

The DGFT further stated that any subsequent Advance Authorisation for gold imports would be granted only after the exporter fulfils at least 50 per cent of the prescribed export obligation under the previous licence.

Additionally, authorisation holders will have to submit fortnightly performance reports certified by an independent chartered accountant detailing gold imports and exports undertaken during the period.

Regional offices of the DGFT have also been directed to submit monthly reports to the central authority regarding the issuance of Advance Authorisations.

Sources said the move was aimed at preventing possible misuse of the scheme, especially amid concerns that large-scale imports could be undertaken to exploit price arbitrage opportunities.

The latest restrictions come a day after the government raised import duty on gold and silver to 15 per cent from 6 per cent, while duty on platinum was increased to 15.4 per cent from 6.4 per cent. The revised rates came into effect from May 13.

The duty hike was introduced against the backdrop of rising import bills and increasing pressure on foreign exchange reserves amid the ongoing West Asia crisis.

Official data showed that gold and silver imports rose 26.7 per cent year-on-year to USD 102.5 billion in FY 2025-26, accounting for 14 per cent of India’s total imports compared to 11.8 per cent in the previous fiscal.

India, the world’s second-largest gold consumer after China, imports large quantities of gold to meet demand from the jewellery sector, leading to significant foreign exchange outflow.

Following the duty revision, the effective import duty on gold and silver, including cess and IGST, has increased to 18.45 per cent from 9.18 per cent earlier.

Industry observers believe the government’s twin measures of higher import duty and tighter import norms are aimed at curbing non-essential imports and stabilising the country’s external trade position.