Centre tightens gold import rules, caps duty-free imports for exporters

The Centre has imposed fresh restrictions on dutyfree gold imports by exporters under the advanceauthorisation AA scheme in an effort to curb the diversion of imported gold into the domestic market and reduce pressure on Indiarsquos foreign exchange reservesUnder the revised rules issued by the Directorate General of Foreign Trade DGFT exporters will now be allowed to import a maximum of 100 kilograms of gold per licence under the schemeThe move comes amid growing concerns over Indiarsquos rising import bill particularly as soaring crude oil prices linked to the ongoing West Asia crisis continue to put pressure on the countryrsquos foreign exchange reservesOfficials said the tighter rules are aimed at improving monitoring of dutyfree gold imports that are meant exclusively for exportoriented jewellery manufacturingFirsttime applicants to face mandatory inspectionsAs part of the revised framework firsttime applicants seeking permission to import gold under the scheme will now have to undergo mandatory physical inspections of their manufacturing facilities by DGFT officials before licences are approvedThe government has also linked future import permissions to export performanceAccording to the updated guidelines exporters will only become eligible for fresh authorisations after fulfilling at least 50 per cent of their export obligations under previous licencesThe new conditions are intended to ensure that imported gold is used strictly for export production rather than being diverted into the domestic market for profitAuthorities believe the stricter compliance measures will help reduce misuse of the scheme and improve transparency in the gold tradeExporters asked to submit regular performance reportsThe DGFT has also introduced enhanced monitoring requirements for exporters importing gold under the advanceauthorisation schemeCompanies will now be required to submit performance reports every fortnight detailing imports exports and utilisation of goldIn addition DGFT regional offices across the country have been instructed to send monthly reports to headquarters to facilitate centralised monitoring of gold imports and export activityOfficials said the move would allow closer scrutiny of the movement of precious metals and help authorities quickly identify irregularities or possible violations of import conditionsThe governmentrsquos latest measures are being viewed as part of a broader effort to tighten oversight of Indiarsquos precious metals trade amid economic uncertainty and volatile global commodity pricesCustoms duty on gold and silver recently increasedThe latest restrictions come shortly after the Centre increased customs duties on imports of gold silver and platinumOn Wednesday the government raised import duties on gold and silver to 15 per cent from the earlier 6 per cent Import duty on platinum was also increased to 154 per cent from 64 per centUnder the revised structure gold and silver imports now attract a 10 per cent basic customs duty along with a 5 per cent Agriculture Infrastructure and Development Cess AIDC taking the total effective duty to 15 per centThe government said the duty hike was aimed at discouraging excessive imports of precious metals which are among the major contributors to foreign exchange outflowsOfficials also expect the move to support macroeconomic stability at a time when rising oil prices and geopolitical tensions are increasing pressure on the Indian economyGold demand remains strong despite policy tighteningThe governmentrsquos latest actions follow Prime Minister Narendra Modirsquos recent appeal urging citizens to avoid nonessential gold purchases for at least a year and adopt austerity measures to help conserve foreign exchange reservesIndia remains one of the worldrsquos largest consumers of gold with strong demand driven by jewellery purchases investment demand weddings and festivalsWith inputs from IANS