‘Unusual surge’: Govt restricts imports of gold jewellery and parts
In response to concerns about the recent surge in gold imports, the Commerce and Industry Ministry on Tuesday restricted jewellery and parts imports with immediate effect, except imports from the UAE under the free trade agreement (FTA), according to a notification issued by the Directorate General of Foreign Trade. The investigative agencies in charge of combating smuggling have expressed alarm over the increase in gold imports, particularly from Least Developed nations (LDCs) and nations with whom India has an FTA. According to reports, the increase is mostly due to importers taking advantage of cheaper taxes in these nations.
A government official clarified that while jewellery imports under the five Harmonised System of Nomenclature (HSN) codes have not been banned, they have been placed under authorization. This is to investigate the reason behind a sudden increase in imports and to better monitor the sources of these imports.
The official explained, “We noticed an unprecedented surge in imports in these categories, particularly from countries with whom we have free trade agreements (FTA), allowing zero duty imports. Another portion of the surge involved imports subject to duty. Due to this sudden and significant increase, the commerce ministry, in consultation with various departments including the Department of Revenue, decided to place these imports under a restricted list. This will enable better monitoring of both the importers and the countries involved. It is an import authorization measure. Traditionally, if jewellery imports are around $50 million and suddenly jump to $1.5 billion, it warrants further investigation.”
This comes after government statistics revealed that imports of banned jewellery parts increased 30 times to $1,551 million in 2023-2024, up from $52 million in 2022-2023. Meanwhile, jewellery imports in other prohibited categories, such as those studded with precious and semi-precious stones such as diamonds and pearls, occurred for the first time during the previous fiscal year.
India’s total gold imports have also increased, resulting in a 5-month high of $19.1 billion in the goods trade imbalance for April. This was mostly driven by gold imports, which increased by 208.99 percent to $3.11 billion in April this year, up from $1 billion in April last year.
According to reports, just a week before the presentation of Budget 2024-25, the Finance Ministry raised import duties on a relatively unknown category of jewellery known as gold findings, which are small components such as hooks, clasps, clamps, pins, and screws used to hold the entire or a portion of a piece of jewellery together.
