Govt restricts silver imports, makes licence mandatory for key categories

Silver import rules tightened to curb non-essential imports; primary keyword “silver imports” used here

New Delhi, late morning — The central government on Saturday tightened rules around silver imports, moving key categories from a freely importable list to the “restricted” category and making an import licence mandatory, according to an official notification seen by this newspaper.

What changed
The notification says 99.9% pure silver bars, unwrought (raw) silver, silver powder and silver coated with gold or platinum will now require prior government approval for import. Customs will not clear consignments in these categories without the requisite licence, officials said.

Why the step was taken
Officials described the move as aimed at reducing non-essential imports and checking the outflow of foreign exchange. “Rising imports of precious metals have been widening the trade deficit and putting pressure on the rupee,” a government source familiar with the matter said on condition of anonymity. The change follows an earlier increase in import duty: on May 13 the government raised import duty on gold and silver from 6% to 15%.

Timing and context
The DGFT notification comes amid a sharp year‑to‑date rise in bullion prices and record gold imports in 2025–26. India’s gold import bill climbed over 24% to about $72 billion last fiscal year, putting added focus on curbing precious‑metal imports. Silver prices have also jumped — from roughly ₹2.30 lakh per kg on 31 December 2025 to about ₹2.69 lakh per kg this month, industry data show.

Trade and routing concerns
Think tanks and officials cited concerns that low‑duty silver could be routed through third countries, notably the UAE, under trade pacts such as the India‑UAE CEPA. “There was a risk of a surge in cheap silver imports routed via Dubai to exploit preferential tariffs,” said Ajay Srivastava, founder of the Global Trade Research Institute (GTRI). The restricted status is intended to plug such channels, the government said.

Rules for importers
Under the new process importers must obtain a licence from the commerce ministry or designated authority before consignments are cleared by customs. Some categories may also be placed under Reserve Bank of India monitoring, which would add compliance for banks and traders dealing in overseas payments for bullion.

Changes to Advance Authorisation
Separately, DGFT has tightened the Advance Authorisation scheme that allows duty‑free imports for exporters. Exporters will be allowed to import a maximum of 100 kg of gold per licence, and first‑time applicants must undergo physical verification of their manufacturing units before licences are issued. Repeat authorisations will be contingent on meeting at least 50% of past export obligations, the notification said. Firms must now file transaction reports every 15 days, certified by a chartered accountant, with regional DGFT officers compiling monthly reports for headquarters.

Industry reaction
Jewellery and manufacturing bodies expressed concern about the suddenness of the move. The All India Gems and Jewellery Council warned higher duties and licensing could push trade into the grey market and spur smuggling, hurting legitimate businesses and small jewellers. “Sudden restrictions create near‑term disruption for manufacturers that rely on imported raw silver,” said an industry executive requesting anonymity.

Ground reality and public impact
On the ground in Delhi and Mumbai, dealers reported an uptick in enquiries about import licences and compliance timelines. Small and medium jewellers — many of whom operate on thin margins — said they would face working capital stress if supplies tighten. Consumers are already seeing higher retail prices after bullion runs earlier this year.

What’s next
Officials said implementation details, including licence application procedures and timelines, will be clarified in follow‑up orders. Traders and industry associations expect further consultations with the commerce ministry and customs in the coming days. Markets will be watching how the new rules affect domestic liquidity of silver and the wider jewellery supply chain.

Focus on enforcement and monitoring is likely to increase, officials added, as New Delhi balances trade deficit concerns with the needs of industry.

In a significant diplomatic and economic breakthrough, India and the United States have agreed on a framework for an interim trade agreement, bringing to a close nearly a year of strained commercial relations. The core of the deal sees the punishing U.S. tariffs on Indian goods slashed from a high of 50% down to 18%, providing immediate relief to a wide range of Indian exporters.

The joint statement, released by the White House and India's Commerce Ministry, outlines a "reciprocal and mutually beneficial" pathway forward, affirming both nations' commitment to negotiating a broader bilateral trade pact. This interim step marks a crucial reset after tensions escalated in 2025 when the Trump administration imposed steep tariffs, partly in response to India's purchases of Russian oil.

The Tariff Transformation: From Penalty to Parity

The most immediate impact of the deal is a drastic reduction in the cost of Indian goods entering the United States. The U.S. has revoked the 25% penal tariff imposed over the Russian oil issue and reduced the base reciprocal tariff, bringing the total levy down to 18%. This is not just a relief but a strategic advantage.

Commerce Minister Piyush Goyal emphasized that the new rate is lower than what India's direct competitors face. "In comparison, the US has imposed nearly 35% duty on China, 20% on Vietnam, 20% on Bangladesh, and 19% on Indonesia. India’s tariff is lower than all these competing countries," Goyal stated. This positions Indian products like textiles, leather, and handicrafts more favourably in the massive U.S. market.

What India Gains: Market Access and MSME Boost

For India, the agreement unlocks unprecedented opportunity. Minister Goyal hailed the deal as one that will "open a $30 trillion market for Indian exporters". Key gains include:

Zero Duty Access: A wide range of Indian products will now enter the U.S. with zero tariffs, including generic pharmaceuticals, gems and diamonds, and aircraft parts.

MSME and Employment Boost: The tariff reduction is a major win for Micro, Small, and Medium Enterprises (MSMEs) in labour-intensive sectors. It is expected to revive clusters in textiles (Ludhiana, Tirupur), leather (Kanpur), and handicrafts, potentially creating hundreds of thousands of new jobs.

Protected Sensitive Sectors: In a critical negotiation win, India has fully shielded its agriculture and dairy sectors. Sensitive products like wheat, rice, milk, poultry, and ethanol have been kept out of the deal, safeguarding farmer interests and rural livelihoods.

What the US Gains: Industrial and Agricultural Openings

In return, India has agreed to eliminate or reduce tariffs on all U.S. industrial goods and a "broad basket" of agricultural products. This provides American manufacturers and farmers with improved access to the Indian market. Concessions are expected in areas where India has limited domestic supply, such as certain agricultural goods like Distiller’s Dried Grains (DDGS), soyabean oil, and alcoholic beverages like wine and spirits.

The U.S. has also cited a commitment from India to purchase American energy products, a move linked to winding down imports of Russian crude. While Indian officials have stressed energy diversification as a sovereign priority, the deal aligns with Washington's strategic goals.

The Road Ahead and Political Reaction

The formal signing of the interim agreement is expected by mid-March 2026. This framework paves the way for negotiations on a full-fledged Bilateral Trade Agreement (BTA), initiated by Prime Minister Narendra Modi and President Donald Trump in February 2025.

The deal has ignited political debate at home. While the government celebrates it as a balanced victory, opposition parties have slammed it. Congress leader Randeep Singh Surjewala accused the government of delivering "a blow to the stomachs of India's 720 million farmers," warning of American agricultural products flooding the Indian market. Minister Goyal has firmly rejected these criticisms, assuring that farmers' and MSMEs' interests are "fully protected".

A Strategic Pivot in Global Trade

This interim deal does more than adjust tariff numbers. It signifies a strategic recalibration between the world's largest democracies amid shifting global trade alliances. Coming close on the heels of India's landmark free trade agreement with the European Union, it underscores New Delhi's multi-aligned trade diplomacy and its appeal as a reliable supply chain alternative.

For Indian businesses, especially small exporters, it offers a breath of fresh air and a chance to reclaim competitive ground. As the two nations work toward a final pact in the coming weeks, the focus will be on converting this framework into sustained economic growth and deeper strategic partnership.

India-EU Free Trade Agreement: A Game Changer in Global Trade

The recently concluded India-EU Free Trade Agreement has emerged as one of the most significant global trade developments in recent years. While trade deals are usually assessed only from the perspective of the two signatory partners, this agreement is different. Its impact is being felt far beyond India and the European Union—especially in neighboring countries like Pakistan and Bangladesh.

As the deal moves closer to implementation, Pakistan has entered panic mode, with exporters warning of massive losses and job cuts. Industry bodies are urging their government to act fast, fearing a collapse of exports to their biggest market—the European Union.

What Is the India-EU Free Trade Agreement?

After nearly 20 years of negotiations, India and the European Union finalized a landmark trade deal with unprecedented tariff reductions:

 97% of EU goods entering India will face zero tariff

 99% of Indian goods exported to the EU will also enjoy zero tariff access

This gives Indian exporters a level playing field in one of the world’s largest and richest consumer markets.

Why Pakistan Is Worried

Pakistan is not part of the EU India FTA, but the fallout directly affects its economy—especially the textile and garment sector.

Until now, Pakistan benefited from the EU’s GSP+ (Generalised Scheme of Preferences Plus) status, which allowed zero-duty textile exports to Europe. At the same time, Indian textile exports faced around 12% tariff, making Pakistani products cheaper in the EU market.

That advantage is now gone.

 Key concerns for Pakistan:

 Loss of price advantage in EU textile market

 Indian goods now compete at zero tariff, same as Pakistan

 Higher production costs in Pakistan due to:

   Expensive electricity

   Higher taxes

   Costly raw materials

As a result, EU buyers are likely to prefer cheaper and higher-quality Indian products.

Massive Economic Stakes for Pakistan

The numbers explain the panic:

 Pakistan exports around $8.8–9 billion worth of goods to the EU

 Nearly 40% of Pakistan’s textile exports go to Europe

 Industry leaders warn of:

   Up to $9 billion export losses

   Risk to nearly 10 million jobs

The All Pakistan Textile Mills Association has already warned that the India-EU Free Trade Agreement could wipe out Pakistan’s EU market share.

Why Europe Matters So Much

The European Union is the world’s largest textile importer, buying nearly $250 billion worth of textiles annually. More importantly, it is a high-value market:

 Stable consumer demand

 Willingness to pay premium prices

 Strong focus on quality and compliance

India was unable to fully tap this market earlier due to high tariffs. Now, with zero-duty access, sectors like textiles, leather, and electronics stand to gain massively.

Bigger Than Pakistan: A Global Shift

This is not just Pakistan’s problem. Countries like Bangladesh, Vietnam, and Turkey, which earlier enjoyed preferential access, will also face tougher competition.

At a broader level, the deal reflects a strategic shift in global trade alliances, as the EU looks to diversify partners amid geopolitical uncertainties and reduced dependence on traditional allies.

The India-EU Free Trade Agreement is a turning point in global trade. For India, it opens the door to Europe’s most lucrative markets. For Pakistan, it signals the end of an era built on tariff advantages.

As competition intensifies, only countries with cost efficiency, quality production, and stable policies will survive. The message is clear: global trade rules are changing—and those who fail to adapt risk being left behind.

Analysis: A "Very Good Relationship" Under Economic Strain

The diplomatic dance between Washington and New Delhi has hit a dissonant chord. U.S. President Donald Trump recently quipped that while he has a "very good relationship" with Indian Prime Minister Narendra Modi, the Indian leader is "not that happy with me" due to substantial tariffs imposed by the United States. This public admission cuts to the core of a growing friction: America's aggressive use of trade as a geopolitical weapon, which is now set to intensify with a new Russia sanctions bill threatening staggering 500% tariffs.

The Spark: Tariffs and a Public Rebuke

The immediate tension stems from existing U.S. tariffs totaling 50% on certain Indian goods, a penalty linked by the Trump administration to India's significant purchases of discounted Russian oil following the Ukraine conflict. The situation turned more pointed when Trump recounted an anecdote about defense deals, quoting PM Modi as approaching him with, "Sir, may I see you please?" to discuss delays in Apache helicopter deliveries. While perhaps meant to be humorous, the portrayal underscores a power dynamic where the U.S. leverages its position on both security and trade fronts.

The Escalation: The 500% Tariff Threat

The friction is poised to move from a simmer to a boil. A newly proposed "Russia Sanctions Bill," which has reportedly received President Trump's approval, seeks to authorize secondary sanctions. Its most potent tool is the potential to impose tariffs as high as 500% on exports from third countries, like India and China, that continue substantive trade in Russian oil. This isn't a typical protective tariff; it's designed to be an economic weapon meant to make purchasing Russian energy "unbearable" by cutting off access to the U.S. market.

Broader Strategy: "America First" and Strategic Decoupling

This hardline trade move is not an isolated incident. It fits seamlessly into the "America First" doctrine being aggressively revived. In a sweeping decision just this week, the Trump administration ordered the U.S. withdrawal from 66 international organizations, including the India-led International Solar Alliance (ISA), a flagship initiative of PM Modi. The White House labeled these bodies as promoting a "globalist agenda" over American interests. This strategic decoupling from multilateral frameworks signals a unilateralist U.S. approach, where traditional alliances and partnerships are secondary to immediate economic and political leverage.

The Global Fallout and India's Dilemma

The combined effect of tariff threats and multilateral withdrawal creates a precarious global environment. For India, it presents a severe policy dilemma. On one hand, its sovereign energy security decisions have brought economic benefit. On the other, it faces punitive measures from a major strategic and defense partner. This push undermines multilateralism and forces nations into binary choices, potentially fragmenting the global order into competing blocs.

Navigating a Unilateralist Storm

President Trump's candid comment about PM Modi's unhappiness is more than diplomatic gossip; it is a symptom of a fundamental shift in U.S. foreign policy. The relationship is now strained by a transactional approach where trade tariffs are wielded as sanctions and long-standing multilateral engagements are abandoned. As the Russia Sanctions Bill moves forward, India and other nations are forced to navigate a world where economic pressure is the primary tool of diplomacy, testing the resilience of even the "very good relationships."