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Govt tightens gold import rules, plugs Dubai route misuse under CEPA

The government has tightened import rules for gold and silver, restricting their entry into India to only nominated agencies, qualified jewellers, and valid TRQ (Tariff Rate Quota) holders under the India–UAE Comprehensive Economic Partnership Agreement (CEPA), the Economic Times reported. The restrictions apply to unwrought, semi-manufactured, and powdered forms of gold and silver. Backdoor gold route via Dubai closed The move follows reports that some importers had exploited ambiguities in customs classifications to bring in nearly pure gold from Dubai under the guise of platinum alloy. By misdeclaring gold as platinum, they were able to access lower import duties offered under CEPA. "This measure follows the Budget announcement to create separate HS codes to ensure that gold imports don't happen in the name of platinum," an official was quoted as saying. HS code reform and CEPA quotas The Budget for FY26 proposed the creation of dedicated HS codes for precious metals like gold dore, silver dore, and platinum. The goal is to better regulate and monitor imports while aligning duty structures. Under CEPA, India allows the import of up to 200 metric tonnes of gold annually from the UAE at a reduced tariff — with a 1 per cent concession available via the TRQ mechanism. Trade council urges diversification In February, the Gem and Jewellery Export Promotion Council (GJEPC) urged the Commerce Ministry to partially shift gold imports from Switzerland to the US to help correct India's trade imbalance. Switzerland currently supplies 35 per cent of India's gold bars. The council proposed a similar shift in silver bar imports from the UK — which supplies 41.54 per cent — to the US. In 2024, India exported $11.58 billion worth of gems and jewellery to the US while importing $5.31 billion, creating a $6.27 billion surplus. The US accounted for 20.28 per cent of India's exports in this category and 12.99 per cent of overall trade. The GJEPC proposal comes amid concerns over potential tariff pressures from US President Donald Trump, who has publicly called out trade imbalances. The council has also proposed lower domestic import duties to offset possible US retaliation.