Government Imposes Restrictions On Import Of Certain Gold Jewellery: Reports – News18

The government has taken a step, which will help in cutting imports of non-essential items and contain the trade deficit. Restrictions on certain articles and gold jewellery have been imposed on Wednesday. An importer would require permission from the government to import gold products. On this, the Directorate General of Foreign Trade (DGFT) explained that there will be no restrictions on imports under the trade agreement between India and the UAE. DGFT also notified that the import policy for these products has been amended with immediate effect from free to restricted.

Every year, India imports 800-900 tonnes of gold. The import of pearls, including precious and semi-precious stones, dipped by 25.36% to about $4 billion during April–May of this fiscal year 2023–2024. There was a contraction in gold imports as well, which was about 40% to $4.7 billion at the same time. Overall, in the fiscal year 2023–24, merchandise imports declined by 10.24% to $107 billion. The merchandise trade deficit during April–May 2022 was $40.48 billion, which in turn stood at $37.26 billion in April–May 2023. The import of certain gold jewellery stood at $110 million in April-May of this fiscal year, and it was imported mainly from countries like Indonesia, the UAE, and the US.

The uncertainties of global economics have caused India’s import of gold to decrease by 24.15% to $35 billion in 2022–2023. The import of yellow line metal was around $46.2 billion in the year 2021–22, and gems and jewellery exports decreased to $38 billion, which is three per cent in the last financial year 2022–23.

Managing director of Kama Jewellery and former chairman of gems and jewellery, Colin Shah, stated in an interview that this step is taken by the government to balance the macroeconomics, and he mentioned that gold should be placed at a reasonable price, as it will help in maintaining the competitive edge for export for the gems and jewellery industry.

This step was taken because in the last few months, it has been noticed that importers have been using a policy flaw to source plain gold jewellery from Indonesia, without paying any import taxes. Indonesia has never supplied gold jewellery to India, but in the last few months dealers have imported 3–4 tonnes without paying any import taxes.