The DGFT has capped duty-free gold imports at 100 kg per authorisation under the Advance Authorisation scheme. It has also introduced stricter compliance, including mandatory inspections, linkage to export performance, and fortnightly reporting.
The Directorate General of Foreign Trade (DGFT) has tightened monitoring of duty-free gold imports under the Advance Authorisation (AA) scheme, capping imports at 100 kilograms per authorisation and introducing stricter compliance checks, according to a Commerce Ministry notification issued on Thursday. The move comes days after Prime Minister Narendra Modi urged citizens to reduce gold purchases and channel savings towards productive investments, amid concerns over rising gold imports and pressure on India's trade balance.
DGFT Sets 100kg Cap on Gold Imports
In a Public Notice dated May 14, the DGFT said it has inserted five new notes under the Standard Input Output Norms (SIONs) for gems and jewellery exports "with immediate effect." The notice stated, "Advance Authorisation (AA) for import of gold shall be issued, subject to a maximum permissible quantity limit of 100 kilograms."
Advance Authorisation is a scheme under the Foreign Trade Policy that allows exporters to import raw materials such as gold without paying customs duty, provided the imported material is used for manufacturing export products. The new rules are aimed at strengthening compliance and monitoring in the gold import ecosystem.
New Compliance and Monitoring Rules
Mandatory Inspections for New Applicants
The DGFT further said, "In case of application for Advance Authorisation by a first-time applicant, a mandatory physical inspection of the applicant's manufacturing facility shall be undertaken by the concerned regional authority to verify the existence, capacity and operational status of the manufacturing facility."
Approvals Linked to Export Performance
The government has also linked fresh approvals to export performance. According to the notice, "Any subsequent Advance Authorisation for the import of gold, shall be considered for issuance only upon fulfilment of at least 50% of the export obligation prescribed under the preceding Advance Authorisations for gold." This means exporters will need to complete at least half of their export commitments before receiving another gold import approval.
Tighter Reporting and Centralised Oversight
The DGFT has also mandated tighter reporting norms for companies importing gold under the scheme. "The Advance Authorisation holder shall submit a fortnightly performance report to the concerned Regional Authority (RA), duly certified by an independent Chartered Accountant certifying gold imports and exports undertaken under the authorisation," the notice said.
Additionally, regional authorities have been directed to send monthly consolidated reports to DGFT headquarters for "centralised monitoring and policy oversight."
Curbing Imports to Manage Trade Deficit
India is among the world's largest importers of gold, and gold imports significantly impact the country's current account deficit and foreign exchange outflows.
The Public Notice said the five new notes have been inserted under SIONs M-1 to M-8 of the Handbook of Procedures 2023, "prescribing conditions for the issuance and monitoring of Advance Authorisations for import of gold." (ANI)
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