India has placed certain types of gold jewellery under a restricted import category because of a significant surge in imports.
The restricted categories include gold jewellery studded with pearls, diamonds, other precious and semi-precious stones and gold parts. These items will now require government approval for import and will incur a 15 per cent duty.
Under the new restrictions, importers will need authorisation from the government to import gold jewellery from various countries.
However, imports from the United Arab Emirates (UAE) will be exempt from these restrictions due to the Comprehensive Economic Partnership Agreement (CEPA) between the two nations, according to a notification from the Directorate-General of Foreign Trade (DGFT).
Experts attribute the sudden spike in imports from countries such as Tanzania and Indonesia to market distortions, prompting the DGFT’s decision.
Data revealed that imports of jewellery parts under the new restricted category skyrocketed to $1.5 billion in 2023-2024, a huge increase from $52 million in the previous fiscal year.
Government officials explained that placing these items on the restricted list allows for better monitoring of importers and the countries of origin.
“When jewellery parts traditionally valued at around $50 million surge to $1.5 billion, it necessitates scrutiny,” an official said.
The majority of these imports occurred post-July 2023, following the government’s liberalisation of imports from nations with free trade agreements. India’s trade deficit climbed to a five-month high of $19.1 billion in April. This rise was primarily driven by increased imports of gold and silver jewellery.
