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Govt imposes import curbs on all articles of gold, silver, platinum

April 02, 2026 5 min read Economics International Relations GS3 (Indian Economy Foreign Trade Government Policies)
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What Happened

  • The Directorate General of Foreign Trade (DGFT) revised the import policy for all articles of gold, silver, and platinum jewellery (under Customs Tariff Heading 7113) from 'Free' to 'Restricted', effective April 1, 2026, requiring importers to obtain a DGFT licence or specific permission.
  • The restrictions apply irrespective of prior contracts, irrevocable letters of credit, advance payments, shipment status, or any other prior commitment — meaning no transitional arrangements are available.
  • The move targets the misuse of India's free trade agreements, particularly the India-ASEAN FTA and India-UAE CEPA, through which importers were routing gold, silver, and platinum jewellery at concessional duty rates, exploiting duty differentials for quick arbitrage profits.
  • Imports under the India-UAE CEPA within prescribed Tariff Rate Quotas (TRQ) will continue to be allowed without a DGFT licence; Export Oriented Units (EOUs) and Special Economic Zone (SEZ) units are also exempt if goods are not meant for domestic sale.
  • This is the latest in a series of progressive tightening steps: plain silver jewellery imports were restricted from September 2025, and platinum jewellery was restricted till April 2026 — the current notification extends restrictions to all precious metal articles comprehensively.

Static Topic Bridges

DGFT and India's Import Policy Framework

The Directorate General of Foreign Trade (DGFT) is the primary regulatory body under the Ministry of Commerce and Industry that administers India's foreign trade policy under the Foreign Trade (Development and Regulation) Act, 1992, and the Foreign Trade Policy (FTP). DGFT classifies all tradeable goods into three import policy categories: 'Free' (importable without restriction), 'Restricted' (requires licence or permission from DGFT), and 'Prohibited' (banned from import). Changes in import policy classification from Free to Restricted are notified through Notification Amendments to the FTP and become effective upon gazette notification.

  • Customs Tariff Heading 7113 covers articles of jewellery and parts thereof, of precious metal — specifically gold (7113 11), silver (7113 19), and platinum-group metals.
  • DGFT issues different types of licences for restricted imports: Advance Authorisation (for re-export), State Trading Enterprises (STEs) licence, and specific import licences for domestic use.
  • India's current FTP 2023 (effective April 1, 2023) is a 5-year policy framework; DGFT Notifications amend it on a rolling basis.
  • Gems and Jewellery is one of India's largest export sectors (approximately $37 billion in FY25), and domestic jewellery manufacturers are the principal stakeholders demanding protection from cheap import competition.

Connection to this news: The shift from 'Free' to 'Restricted' under Tariff Heading 7113 closes the open-door that importers were exploiting — from here on, every import of gold, silver, or platinum articles requires affirmative DGFT approval, inserting a regulatory checkpoint that makes large-scale FTA arbitrage commercially unviable.

FTA Misuse Through Rules of Origin Violations

Rules of Origin (RoO) are the criteria used to determine the national source of a product for trade policy purposes. Under FTAs, goods must meet specified rules of origin to qualify for preferential (reduced) tariff treatment — typically requiring a defined percentage of value addition or a Change in Tariff Classification (CTC) in the exporting FTA country. Misuse occurs when exporters in third countries route goods through FTA partner countries with minimal processing to fraudulently claim preferential rates — a practice known as "trade deflection" or "FTA arbitrage." India-ASEAN FTA (signed 2009) and India-UAE CEPA (signed 2022) have both been identified as vulnerable to such misuse in the gems and jewellery segment.

  • Indonesia (ASEAN FTA member) emerged as an unusual source of gold jewellery imports into India — India imported 3-4 tonnes from Indonesia under ASEAN FTA duty-free provisions without Indonesia historically being a jewellery supplier.
  • Under India-UAE CEPA, gold imports from UAE surged by 210% to $10.7 billion during FY24; GTRI (Global Trade Research Initiative) flagged potential rules-of-origin misuse.
  • Some importers misdeclared gold as platinum alloy to access lower duty rates under CEPA.
  • Under India-ASEAN FTA, the value addition norm for jewellery was low enough to allow near-pure gold imported into Thailand or Indonesia to be minimally processed and re-exported to India as "ASEAN-origin" goods.

Connection to this news: The DGFT's blanket 'Restricted' classification for all precious metal articles addresses the FTA misuse problem comprehensively — instead of patching individual FTA loopholes, it requires every importer to affirmatively justify the import, regardless of origin.

India's Gems and Jewellery Sector and Trade Policy Linkages

India's gems and jewellery industry is one of the country's largest employment generators and export earners, employing approximately 4.64 million people (mostly artisans in Rajasthan, Gujarat, Maharashtra, and Tamil Nadu) and contributing approximately 7% of total merchandise exports. The sector is a major beneficiary of government trade policy support — it has preferential access to bullion imports through nominated agencies, lower GST rates on jewellery (3%), and export promotion through the Gems and Jewellery Export Promotion Council (GJEPC).

  • India is the world's largest cutter and polisher of diamonds, processing approximately 90% of the world's rough diamonds by volume.
  • Gold jewellery exports: approximately $14-16 billion annually; diamond jewellery: approximately $20 billion.
  • Basic customs duty on gold: 15% (reduced from 12.5% in Union Budget 2024); on silver: 15%.
  • India-UAE CEPA allows import of gold jewellery from UAE at 5% duty (within TRQ), creating a significant duty differential that incentivises routing.
  • The Tariff Rate Quota (TRQ) under CEPA caps concessional imports; breach of TRQ triggers standard duty — but the restriction now adds a licensing layer even within TRQ.

Connection to this news: The domestic jewellery manufacturing sector has been pressing for these restrictions for over two years, arguing that cheap FTA imports undercut artisans who pay GST, labour costs, and full customs duty on bullion inputs — the DGFT notification directly addresses this competitive imbalance.

Key Facts & Data

  • Customs Tariff Heading covered: 7113 (gold, silver, platinum jewellery articles)
  • Policy change: 'Free' to 'Restricted', effective April 1, 2026
  • No transitional arrangements available — immediate effect regardless of prior contracts
  • Exceptions: India-UAE CEPA imports within prescribed TRQ; EOU/SEZ units for re-export
  • Earlier restrictions: plain silver jewellery (September 2025), select platinum jewellery (November 2025)
  • India-UAE gold imports surged 210% to $10.7 billion in FY24
  • Indonesia FTA route: 3-4 tonnes of gold jewellery imported duty-free (anomalous — no prior trade history)
  • India's gems and jewellery exports: approximately $37 billion in FY25
  • Basic customs duty on gold: 15%; silver: 15%