Shares of jewellery stocks including Titan Company, Kalyan Jewellers India, Thangamayil, and Senco Gold have fallen up to 2% following the Directorate General of Foreign Trade's tightening of rules governing duty-free gold imports by gems and jewellery exporters. The move comes just two days after the government raised gold import duty to 15% from 6% as part of broader efforts to contain a record import bill. According to latest market reports, the tighter rules significantly raise compliance requirements as the government looks to curb gold imports amid growing concerns over India's rising import bill, particularly as soaring crude oil prices linked to the ongoing West Asia crisis continue to put pressure on the country's foreign exchange reserves.
Under the revised framework, Advance Authorisation licences for duty-free gold imports will now be capped at 100 kilograms per licence. First-time applicants will face mandatory physical inspections of their manufacturing units by DGFT officials to verify the existence, operational status and production capacity of the facility before approvals are granted. As reported by The Economic Times, for repeat applicants, fresh import authorisations will be issued only after at least 50% of the export obligation under an earlier licence has been fulfilled. The measure is aimed at ensuring compliance and preventing exporters from accumulating pending obligations under the scheme, with authorities believing the stricter compliance measures will help reduce misuse of the scheme and improve transparency in the gold trade.
Exporters operating under the Advance Authorisation route will additionally have to submit fortnightly performance reports, certified by an independent Chartered Accountant, detailing gold imports and exports undertaken through the licence. Regional authorities will be required to send monthly consolidated reports to DGFT headquarters covering all authorisations issued and related trade activity. According to The Economic Times, these measures are aimed at ensuring compliance and preventing exporters from accumulating pending obligations under the scheme, with regional authorities also required to send monthly consolidated reports to DGFT headquarters covering all authorisations issued and related trade activity. The DGFT has also introduced enhanced monitoring requirements for exporters importing gold under the Advance Authorisation Scheme, with companies now required to submit performance reports every fortnight detailing imports, exports and utilisation of gold.
The latest restrictions come shortly after the Centre increased customs duties on imports of gold, silver and platinum. On Wednesday, the government raised import duties on gold and silver to 15% from the earlier 6%, while import duty on platinum was also increased to 15.4% from 6.4%. Under the revised structure, gold and silver imports now attract a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC), taking the total effective duty to 15%. The government said the duty hike was aimed at discouraging excessive imports of precious metals, which are among the major contributors to foreign exchange outflows. Officials also expect the move to support macroeconomic stability at a time when rising oil prices and geopolitical tensions are increasing pressure on the Indian economy.
The tighter rules significantly raise compliance requirements as the government looks to curb gold imports. The measures could weigh on jewellery exports by slowing approval processes and increasing procedural checks. Exporters may also face higher working capital pressures and delays in sourcing gold under the revised framework. India is among the world's largest exporters of gold jewellery, with the government allowing jewellers and manufacturers to import gold duty-free for export production under the Advance Authorisation scheme. The government's latest actions follow Prime Minister Narendra Modi's recent appeal urging citizens to avoid non-essential gold purchases for at least a year and adopt austerity measures to help conserve foreign exchange reserves, with officials expecting the move to support macroeconomic stability at a time when rising oil prices and geopolitical tensions are increasing pressure on the Indian economy.
The tightening follows a sharp jump in India's gold imports during 2025-26. According to The Economic Times, gold imports rose more than 24% to a record $71.98 billion during the year, although import volumes declined 4.76% to 721.03 tonnes. Switzerland remained India's biggest source of gold imports with around 40% share, followed by the UAE at over 16% and South Africa at roughly 10%. The government's latest measures are being viewed as part of a broader effort to tighten oversight of India's precious metals trade amid economic uncertainty and volatile global commodity prices, with the duty hike aimed at discouraging excessive imports of precious metals, which are among the major contributors to foreign exchange outflows.
