Import Restrictions: Challenges in Finding Specific Gold Jewellery Types
Government restricts sudden import surges to safeguard domestic industries
New Delhi: If you are planning to buy gold jewellery, this news might disappoint you a bit. You may face some difficulty in finding certain types of gold jewellery. The reason behind is Indian government’s strictness on gold jewellery. The ban has been imposed on the import of certain gold jewellery and parts from other countries.
How and why this restriction has been imposed on the import of certain types of jewellery
The government has enforced a ban on importing gold jewellery and parts from all countries, except for its Free Trade Agreement (FTA) partner, the United Arab Emirates (UAE). This implies that gold jewellery imports from the UAE remain permissible. This measure aims to address the sudden rise in imports from countries such as Tanzania and Indonesia. Reports indicate that there was an abrupt surge in gold imports from these nations due to the India-ASEAN Free Trade Agreement. These gold articles were imported for the purpose of jewelry making in India.
The decision of the Directorate General of Foreign Trade (DGFT), issued on June 11th, places prepared gold products such as gold-set pearls, gold-set diamonds, precious stone-set gold, and gold parts in the “restricted” category from “free.” This means that a license/permit will be required from the government for importing goods placed in the restricted category.
The reason behind the government’s strict stance on gold
The sudden surge in imports from countries like Tanzania and Indonesia prompted the DGFT’s decision. Reports indicate that the India-ASEAN Free Trade Agreement caused a sudden influx of gold articles being imported into India for jewelry production.
The highest increase has been seen in the case of gold jewellery part imports. Imports of its parts surged to $1.55 billion in the financial year 2023-24, up from $51.51 million (5.15 crore dollars) a year ago, i.e., in FY2022-23. The UAE ($1 billion), Indonesia ($341.9 million), Tanzania ($107.2 million), and Thailand ($35.9 million) are the biggest sources for the import of gold jewellery parts.
Various reports indicate that the ban on imported gold jewelry is unlikely to significantly impact the domestic market. It will primarily affect importers who were profiting from bulk jewelry sales. It is believed that this government measure will support the domestic jewellery industry.
India has witnessed a notable increase in total gold imports. In April 2024, gold imports tripled to $3.1 billion, compared to $1 billion in April 2023.
The government actively imposes restrictions on sudden import surges or non-essential items to curb imports and safeguard domestic industries. This strategy aims to protect and promote domestic industries.