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.

Government Hikes Gold, Silver Import Duty to 15% to Ease Forex Pressure

The Centre has sharply raised import duties on gold and silver to 15% from 6%, effective Wednesday, in a bid to curb overseas purchases and support the rupee, which touched a record low amid geopolitical tensions.

The decision comes days after Prime Minister Narendra Modi urged citizens to refrain from buying gold jewellery for a year in the national interest, as India grapples with widening trade deficits and pressure on foreign exchange reserves.

 Duty Structure Revised

The government has imposed a 10% Basic Customs Duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC) on imports of gold and silver. This effectively doubles the earlier levy, making the metals significantly costlier for importers.

Industry sources said the move follows the reduction of duties to 6% in the 2024 budget. Officials familiar with the matter indicated it aims to moderate non-essential imports at a time when the country is the world’s second-largest consumer of gold.

 Prices Surge in Futures Market

Following the announcement, gold and silver futures on the Multi Commodity Exchange (MCX) jumped sharply. Gold prices rose by around ₹9,000-₹9,700, crossing ₹1.63 lakh per 10 grams in some contracts, while silver gained nearly ₹18,000, hovering close to ₹3 lakh per kg.

Physical market prices are also expected to reflect the higher landed costs soon, potentially affecting retail jewellery demand across the country.

Rupee Under Strain

The rupee had hit an all-time low of ₹95.50-₹95.63 against the US dollar earlier this week, weighed down by soaring oil prices linked to the US-Iran conflict and persistent foreign investor outflows.

By reducing gold and silver imports, which account for a substantial part of the import bill, the government hopes to ease pressure on reserves. In recent months, India has been importing an average of around 60 tonnes of gold monthly, contributing billions of dollars to the current account deficit.

Industry Reactions and Concerns

Bullion traders and jewellers have expressed mixed views. Surendra Mehta, National Secretary of the India Bullion and Jewellers Association, noted that the step was taken to control the current account deficit but could dampen demand given already elevated prices.

Some industry insiders in Mumbai warned that higher duties might revive smuggling networks, which had subsided after the previous reduction in levies. A private bank bullion dealer pointed out potential profit margins in unofficial channels at current price differentials.

Jewellery stocks reacted negatively on Tuesday, with shares of companies like Kalyan Jewellers, Senco Gold, Titan, and others falling between 7% and 10%.

Imports Likely to Hit Multi-Year Low

Analysts expect gold imports to drop significantly. Reports suggest April imports could touch a 30-year low, with banks already slowing shipments amid additional tax uncertainties.

India imports nearly all its gold requirements, with the annual bill running into lakhs of crores. The move is seen as part of broader efforts to promote austerity and conserve foreign exchange during uncertain global times.

Impact on Consumers and Markets

For ordinary buyers, especially ahead of the wedding season, the duty hike translates into higher prices for jewellery and coins. Local jewellers in major markets like Mumbai, Delhi, and Chennai are likely to pass on the costs, though some may absorb part of it initially to maintain sales.

The development follows PM Modi’s public appeal on May 10 and 11, where he recalled how people donated gold during crises and called for restraint in purchases for national interest. His remarks had already triggered some caution among buyers in states like Gujarat.

What Lies Ahead

Finance Ministry officials have not issued further detailed comments, but the timing suggests a coordinated policy response to external shocks. Markets will closely watch the impact on overall precious metals demand and the rupee’s trajectory in the coming days.

Whether this curbs imports effectively or pushes more activity underground remains to be seen. For now, the higher duties have immediately made gold and silver more expensive, reinforcing the government’s message of fiscal prudence amid challenging times.