As Union Budget 2026 approaches, India's precious metal refiners are seeking relief from the current duty structure that favours importers over local refiners through free trade agreements. MMTC-PAMP Managing Director and CEO Sami Guha highlighted on Friday that the duty gap has majorly affected the competitiveness of domestic refiners, even as the government is aware of the problem. Guha emphasized that the entire precious metal refining sector has experienced this disparity in duty, especially through the SEPA route between what refiners receive as Dore versus what refined bullion is imported at. As per PTI, the duty gap puts refiners at a significant disadvantage, though the government appears to be aware of the issue.
According to PTI, dore imports currently attract a duty of 6% for both gold and silver. Refiners receive a 0.65% differential, bringing the effective duty rate down to 5.35%. MMTC-PAMP largely imports gold in dore form for refining, with gold-silver imports historically maintaining a 1:1 ratio. The company imported approximately 40 tonnes of gold and 50 tonnes of silver in the 2024-25 financial year. In the April-December period of the current fiscal year, imports stood at 36 tonnes of gold and 60 tonnes of silver, with Guha pointing to overwhelming demand for silver, reflecting a shift in market dynamics.
Bullion has been kept out of free trade agreements signed after Single Euro Payments Area (SEPA), and the industry hopes that upcoming trade deals will also exclude gold and silver from concessional duty regimes. Guha suggested that targeted policy support is needed to help India enhance its refining capabilities and increase the number of London Bullion Market Association-accredited refineries. As reported by PTI, he requested the government to consider input-related benefits through duty differentials, either via the FTA route or by widening the existing differential, which would encourage local refiners to invest in refineries, achieve returns on investment, and upgrade their refining capacity to a global level. MMTC-PAMP is ready to support the government or ministry from a technical standpoint, given its expertise in running an LBMA refinery, Guha added.
