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India has tightened metallic imports successful a large argumentation determination to halt traders from taking vantage of a caller work spread created aft the authorities raised import taxes connected precious metals.
Once duties connected golden and metallic were accrued to 15%, concerns grew that lower-duty metallic could commencement entering India done Dubai nether the India-UAE escaped commercialized agreement, giving importers a mode to debar the afloat load of the higher tariff. To unopen that route, the Centre has shifted metallic imports from the “free” class to “restricted”, which means traders volition present request authorities support earlier bringing metallic into the country.
The decision, announced conscionable days aft the work hike, is portion of a wider effort to power precious metallic inflows, support overseas speech reserves, and adjacent commercialized loopholes.
New rules for metallic imports
On May 16, the Directorate General of Foreign Trade (DGFT), done Notification No. 17/2026-27, changed silver’s import presumption from “free” to “restricted” with contiguous effect. This means importers present request a authorities licence to import metallic into India.
The caller regularisation besides covers metallic alloys mixed with golden and platinum.
What was the import work hike?
Earlier connected May 12, the authorities raised import work connected golden and metallic from 6% to 15%. Along with this, bullion imports besides faced a 3% Integrated Goods and Services Tax (IGST).
Loophole successful the FTA
Under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which started connected May 1, 2022, India is gradually cutting tariffs connected metallic imports from the UAE from 10% to zero implicit 10 years, ending successful 2031.
Right now, the concessional tariff connected metallic from the UAE is 7%.Before May 12, India’s mean import work connected metallic was 6%, truthful determination was small crushed to way metallic done Dubai. "But the government’s determination connected May 12 to rise the modular tariff to 15% widened the spread betwixt the mean work and the UAE concessional complaint to 8 percent points, creating a beardown inducement for traders to reroute planetary metallic shipments done Dubai," deliberation vessel Global Trade Research Initiative (GTRI) flagged.
Centre steps successful with argumentation measures
Officials fearfulness this bigger work quality could pb to a ample emergence successful low-duty metallic imports done the UAE. The caller licence strategy is meant to assistance the authorities power however overmuch metallic enters India and when. In a report, GTRI stated, “Officials fearfulness the widening tariff spread could trigger large-scale arbitrage-driven imports from the UAE.The caller licensing request is expected to springiness the authorities tighter power implicit the quantity and timing of metallic imports portion inactive allowing duty-free imports for export-oriented industries.”
What astir export industries?
The restrictions volition not use to 100% Export Oriented Units (EOUs), Special Economic Zones (SEZs), oregon firms importing metallic nether export-promotion schemes similar Advance Authorisation for products specified arsenic jewellery. This means exporters tin inactive entree metallic for manufacturing.“The restrictions volition not use to imports by 100% Export Oriented Units, Special Economic Zones, oregon firms importing metallic nether export-promotion schemes specified arsenic Advance Authorisation for usage successful export products similar jewellery,” the deliberation vessel said.
What astir golden inflows?
Gold has not been moved to the restricted class due to the fact that the work vantage done the UAE is overmuch smaller, astir 1% nether a tariff-rate quota system, truthful the accidental of large-scale arbitrage is lower.India’s metallic imports crossed $12 cardinal successful fiscal twelvemonth 2026, marking a immense 150% leap from the erstwhile year. At the aforesaid time, golden imports roseate much than 24% to a grounds $71.98 cardinal successful 2025-26, adjacent though shipment volumes fell 4.76% to 721.03 tonnes.This crisp emergence added to authorities concerns and these measures are aimed astatine cutting non-essential imports and reducing unit connected overseas speech reserves astatine a clip erstwhile precocious crude lipid prices and planetary geopolitical tensions are affecting the economy.
