Indian banks have halted gold and silver import orders from overseas suppliers as tons of the metals remain stuck at customs due to the absence of a formal government order authorising bullion imports, according to trade sources reported by Reuters. The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, typically issues an order at the start of each financial year listing banks authorised by the Reserve Bank of India to import gold and silver. The previous order, issued in April 2025, was valid until the end of the last financial year on March 31, and banks are now awaiting a fresh DGFT directive. As reported by The Hindu BusinessLine, this development has not been previously reported, highlighting the severity of the current import suspension.
The uncertainty over the timing of the DGFT order has led banks to halt new import orders from overseas suppliers, with more than 5 tons of gold stuck without customs clearance and around 8 tons of imported silver also stuck without clearance, as reported by Reuters. A Mumbai-based bullion dealer at a private bank stated that banks expected the DGFT to issue the order in early April, but with no update so far, the consignments cannot be cleared. Another bullion dealer noted there is no point in placing new orders when earlier consignments cannot be cleared. According to The Hindu BusinessLine, this uncertainty has created a complete halt in the import process, with no fresh orders being placed while existing consignments remain in limbo.
India's gold demand in 2025 fell to 710.9 metric tons, the lowest level in five years, according to the World Gold Council, as reported by Reuters. Gold and silver inventories from previous months' imports are experiencing drawdowns, with the market now relying on sales from exchange-traded funds, which are seeing redemptions. Surendra Mehta, secretary at the India Bullion and Jewellers Association, emphasized there is a need to bring clarity and ensure imports resume, warning that without imports, supply shortages will emerge and premiums will rise after Akshaya Tritiya, the second-largest gold-buying festival in India. The halt in imports could significantly impact global gold and silver prices, as India serves as the world's second-largest gold consumer and biggest silver buyer, relying on overseas purchases to meet nearly all its demand.
The halt in gold and silver imports could have significant economic effects, potentially narrowing India's trade deficit and supporting the rupee, which has been among the worst-performing Asian currencies so far this year, according to Reuters reports. As the Iran conflict has pushed up prices of oil, gas and fertiliser, India's import bill is likely to rise in April, which may have prompted the government to slow gold and silver imports to contain the trade deficit. Authorities have carried out various measures designed to reduce pressure on the currency, including urging refineries to curb their spot dollar purchases. The DGFT did not immediately respond to a Reuters request for comment, highlighting the government's cautious approach to managing import policy during uncertain global economic conditions.
