India tightens gold import rules to curb smuggling, imposing restrictions on colloidal precious metals and alloys. Learn how these regulations impact the gold market and trade compliance at The Interview Times.
India, the world’s second-largest gold consumer, has introduced stricter gold import rules to tackle smuggling and duty evasion. The Ministry of Commerce and Industry has imposed restrictions on colloidal precious metals, alloys, and chemical compounds containing gold, effective immediately. These measures aim to close loopholes exploited by smugglers, particularly through trade agreements like the India-UAE Comprehensive Economic Partnership Agreement (CEPA). Here’s a detailed look at the new regulations, their implications, and their impact on India’s gold market.
Why the New Gold Import Regulations?
Gold smuggling, driven by high import duties—6.6% on gold bars, 6% on dore bars, and 22% on jewelry—has been a persistent challenge. Smugglers have exploited loopholes by importing gold disguised as colloidal metals or alloys containing over 1% gold by weight, which attract lower or zero duties. These materials are then processed to extract pure gold, evading taxes. The new gold import rules address this by restricting such imports.
According to industry experts, smugglers have leveraged trade routes from Thailand, the UAE, Japan, and Australia, using free trade agreements to bypass duties. The Directorate of Revenue Intelligence (DRI) seized over 1,300 kg of smuggled gold in 2023-24, with daily smuggling estimated at 700 kg, causing losses of nearly $10 billion annually. The tightened regulations aim to enhance transparency and curb illicit trade.
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Key Changes in Gold Import Rules
The Ministry of Commerce and Industry has outlined the following measures:
- Restrictions on Colloidal Metals and Alloys: Imports of colloidal precious metals and chemical compounds under Customs Tariff Heading (CTH) 2843 are now restricted, including gold-containing alloys of palladium, rhodium, and iridium.
- Authorized Importers Only: Only nominated agencies, qualified jewelers, and valid Tariff Rate Quota (TRQ) holders under CEPA can import gold and silver.
- New HS Codes: The new gold import regulations introduce Harmonized System (HS) codes for gold dore, silver dore, and high-purity platinum to prevent misdeclaration of gold as platinum alloys.
- Industrial Use Exemption: Imports for industrial purposes are permitted, ensuring legitimate businesses are not disrupted.
These measures build on Budget 2025 reforms, which eliminated outdated HS codes to streamline compliance.
Impact of Gold Import Rules on the Gold Market
The new Gold Import Rules are expected to:
- Reduce Smuggling: By closing loopholes, the rules will curb illegal gold inflows, protecting revenue.
- Increase Compliance Costs: Importers face stricter scrutiny, potentially raising costs for jewelers.
- Stabilize Prices: Limiting illicit gold supply may stabilize prices. On June 19, 2025, gold prices remained steady, reflecting market caution.
- Shift Import Sources: The Gem and Jewellery Export Promotion Council (GJEPC) suggests diversifying gold imports from Switzerland to the US to balance trade.
Challenges and Criticism
While the regulations aim to curb smuggling, they may increase costs for legitimate importers, potentially affecting jewelry prices. Critics argue that high import duties fuel smuggling, and lowering tariffs could complement enforcement efforts.
Recent cases, like the arrest of an Air India crew member on June 14, 2025, for smuggling 1.373 kg of gold worth ₹1.41 crore, highlight organized smuggling networks. The DRI’s efforts underscore the need for robust enforcement alongside regulatory changes.
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What’s Next?
India’s tightened gold import rules reflect a commitment to transparency in the precious metals market. As the country balances its cultural affinity for gold with economic priorities, stakeholders will monitor the impact of these regulations on prices, supply chains, and smuggling.
For the latest updates on India’s gold market and import policies, stay tuned to The Interview Times.