Govt Tightens Policy To Import Silver Bars

(MENAFN- Live Mint) The government issued an order on Saturday imposing curbs on silver imports to curb surging precious metal imports, narrow the trade deficit, and support the rupee amid mounting external pressures. This comes after the government increased import tariffs on gold and silver to 15%, and later tightened compliance norms for gold imports.

According to the Ministry of Commerce and Industry order on Saturday, the import policy for a silver bar, including silver played with gold and platinum, containing 99.9 percent or more by weight of silver was revised from "Free" to "Restricted". The same was revised for the“other” silver bar category.

Also Read | Gold, silver prices today: Check retail rates of 24K, 22K gold, 999 silver

This was, however,“subject to Policy Condition No. 7 of Chapter 71 of ITC (HS) 2022, Schedule - I (Import Policy) with immediate effect,” according to the order signed by the Director General of Foreign Trade and Commerce.

The order read,“In exercise of powers conferred by Section 3 and Section 5 of Foreign Trade (Development & Regulation) Act, 1992, read with paragraph 1.02 and 2.01 of the Foreign Trade Policy, 2023, as amended from time to time, the Central Government hereby amends the import policy of ITC (HS) code 71069221 and 71069229 covered under Chapter 71 of ITC (HS) 2022, Schedule - I (Import Policy) with immediate effect.”

Goods in the restricted category require a government license for import.

Govt's earlier moves | In points

1. On May 13, the government hiked import duty on precious metals from 6 per cent to 15 per cent. This reversed the 2024 duty cuts. The finance ministry notified the changes through multiple customs notifications on 12 May. The revised rates came into effect on 13 May.

According to notifications, the government increased the basic customs duty on several categories of gold and silver import to 10% from 5%, while the Agriculture Infrastructure and Development Cess (AIDC) of 5% remains in place, taking the total effective import tax to 15%.

Also Read | Gold, silver prices today: Check retail rates of 24K, 22K gold, 999 silver

2. Earlier this month, the government tightened compliance norms for gold imports under the Advance Authorisation scheme, introducing stricter quantity caps, physical verification requirements and periodic reporting obligations amid heightened scrutiny of bullion imports.

In a notification, the Directorate General of Foreign Trade (DGFT) said the Advance Authorisation (AA) for import of gold“shall be issued, subject to a maximum permissible quantity limit of 100 kilograms”. Earlier, there was no limit on gold imports under the Advance Authorisation (AA) scheme-which permits duty-free import of gold for export purposes.

Mint earlier quoted a government official as saying that the tighter norms were introduced after import duty on gold was increased to 15%, amid concerns that the scheme could be misused for“price arbitrage”.

Also Read | Comex gold drops $35/oz; silver tumbles $5/oz amid stronger dollar, rate fears

3. India ​began levying a ⁠3 percent integrated goods and services tax (IGST) on gold and silver imports, prompting banks to halt imports for more than a month, Reuters reported earlier.

As a result, April imports fell ​to a near 30-year low. Banks have since resumed imports after paying ​the 3% IGST, ⁠but imports are now likely to fall again following the increase in import duties, bullion dealers were quoted by Reuters as saying.

The higher duties are expected to dampen demand in the world's second-largest consumer of precious metals, although they may help narrow India's trade deficit and support the rupee, one of Asia's worst-performing currencies.

Also Read | Govt hikes import duty on gold, silver. What does it mean for MCX gold rates?

However, industry officials warned that higher import taxes could revive smuggling, which ​had eased after India cut tariffs in mid-2024.

The move came after Prime Minister Narendra Modi urged people to avoid gold purchases for a year to help protect foreign exchange ​reserves. India meets almost all of its gold consumption through imports.

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