Govt tightens gold import rules under AA scheme, caps duty-free imports at 100 kg – Firstpost

The government on Thursday tightened norms governing gold imports under the Advance Authorisation (AA) scheme, capping duty-free imports at 100 kg per licence and introducing stricter monitoring measures for exporters.

The move comes a day after the Centre sharply raised import duties on gold and silver in a bid to support the rupee amid rising geopolitical tensions linked to the conflict in West Asia.

Under the AA scheme, jewellery exporters are allowed to import raw materials and inputs without paying customs duty, provided they are used in products meant for export. Earlier, there was no upper limit on gold imports under the scheme.

In a public notice on Thursday, the Directorate General of Foreign Trade (DGFT) said, “AA for import of gold shall be issued, subject to a maximum remissible quantity of 100 kilograms.”

Tighter compliance requirements

The government has also introduced tighter compliance requirements for applicants.

First-time applicants seeking Advance Authorisation for gold imports will now face mandatory physical inspection of their manufacturing units to verify operational capacity and infrastructure.

Additionally, exporters applying for subsequent authorisations will only be considered if they have fulfilled at least 50% of the export obligation under their previous licences. The measure is aimed at preventing misuse of the scheme through multiple authorisations.

The DGFT further mandated that AA holders submit fortnightly performance reports, certified by an independent chartered accountant, detailing gold imports and exports undertaken under the scheme.

Regional authorities of the DGFT will also be required to send monthly reports to the central office containing details of Advance Authorisations issued and related trade activity.

Govt raises import duties on gold, silver

The government on Wednesday sharply raised import duties on gold, silver and platinum in a bid to curb non-essential imports and contain pressure on India’s widening import bill amid the ongoing West Asia conflict.

With effect from May 13, the import duty on gold and silver has been increased to 15% from 6%, while the duty on platinum has been raised to 15.4% from 6.4%. The revised rates also apply to related items such as gold and silver dore, coins and findings.

The move comes amid a sharp rise in precious metal imports. Gold and silver imports climbed 26.7% year-on-year to USD 102.5 billion in FY2025-26, accounting for 14% of India’s total imports, up from 11.8% in the previous fiscal.

The duty hike follows Prime Minister Narendra Modi’s recent call for reducing avoidable foreign exchange expenditure, including curbing gold purchases.

India, the world’s second-largest consumer of gold after China, imports large quantities of the metal to meet demand from the jewellery sector, leading to substantial foreign exchange outflows.

The rupee had fallen to a record low of 95.75 against the US dollar on Tuesday, though it recovered partially on Wednesday after the government announced the higher duties.

Under the revised structure, the basic customs duty on gold has been doubled to 10%, while the Agriculture Infrastructure and Development Cess (AIDC) has been increased from 1% to 5%. Together, these changes take the effective import duty on gold and silver to 15%.

In addition, importers must pay a 3% Integrated GST (IGST), pushing the total tax incidence on gold imports to 18.45%, compared to 9.18% earlier.

India’s gold imports rose over 24% to a record USD 71.98 billion in FY2025-26. However, in volume terms, imports declined 4.76% to 721.03 tonnes during the year.

With inputs from agencies