The Centre on Thursday imposed fresh restrictions on gold imports under the Advance Authorisation (AA) scheme, a day after sharply increasing import duty on precious metals. The move comes as the government tries to control rising imports and reduce pressure on India’s foreign exchange reserves amid global uncertainty and the West Asia crisis.
Under the new rule, jewellery exporters will now be allowed to import a maximum of 100 kg of gold duty-free under the Advance Authorisation scheme. Earlier, there was no upper limit on such imports.
The scheme allows exporters to import raw materials and inputs without paying customs duty if those materials are used to manufacture export products.
Government tightens checks on gold imports
In a public notice, the Directorate General of Foreign Trade said, “AA for import of gold shall be issued, subject to a maximum remissible quantity of 100 kilograms.”
The government has also introduced stricter checks for companies applying under the scheme for the first time.
It said, “In case of application for Advance Authorisation by a first-time applicant, a mandatory physical inspection of the applicant’s manufacturing facility will be undertaken to verify the existence, capacity and operational status of the unit.”
The notice further added, “Any subsequent AA for the import of gold, shall be considered for issuance only upon fulfilment of at least 50 per cent of the export obligation…”
Exporters importing gold under the scheme will now also have to submit a performance report every two weeks. The report must be certified by an independent chartered accountant and include details of both imports and exports.
Officials said the tighter rules were introduced to prevent possible misuse of the scheme, especially after the sudden rise in import duty created chances for price arbitrage.
Duty hike comes amid surge in gold imports
The new restrictions come just a day after the government increased import duty on gold and silver from 6 per cent to 15 per cent. Import duty on platinum was also raised from 6.4 per cent to 15.4 per cent.
With Integrated GST (IGST) included, the total effective duty on gold and silver has now increased to 18.45 per cent from 9.18 per cent earlier.
The duty hike followed Prime Minister Narendra Modi’s recent appeal asking citizens to reduce non-essential spending, including gold purchases, amid global fuel and economic concerns linked to tensions in West Asia.
India’s gold and silver imports rose 26.7 per cent year-on-year to USD 102.5 billion in FY2025-26. Their share in India’s total imports also increased sharply from 11.8 per cent to 14 per cent.
India, which is the world’s second-largest consumer of gold after China, depends heavily on imports to meet jewellery demand. Large gold imports also lead to a major outflow of foreign exchange.
The rupee had touched a record low of 95.75 against the US dollar earlier this week before recovering slightly after the government announced the duty hike.