India’s DGFT issues five new compliance norms for gold advance authorisations under gems and jewellery SIONs — the latest move in a sweeping policy crackdown on precious metal imports triggered by the West Asia crisis
The Directorate General of Foreign Trade has issued Public Notice No. 11/2026-27 dated May 14, tightening the Advance Authorisation framework for duty-free gold imports by gems and jewellery exporters — the most granular regulatory intervention yet in an escalating government effort to contain India’s precious metal import bill.
The notice, signed by DGFT Director General Lav Agarwal, inserts five new notes under Standard Input Output Norms M-1 to M-8 covering the gems and jewellery product group. The changes take immediate effect.
The most significant restriction is a hard quantity ceiling: Advance Authorisation for gold imports will now be issued subject to a maximum permissible quantity of 100 kilograms per application. Beyond this, any first-time applicant seeking Advance Authorisation must undergo a mandatory physical inspection of their manufacturing facility by the concerned Regional Authority to verify existence, capacity, and operational status before a licence is granted — closing a gap that had allowed paper-based authorisations with limited on-ground verification.
For repeat applications, the DGFT has introduced a progressive compliance condition: a subsequent Advance Authorisation for gold imports will only be considered after the applicant has fulfilled at least 50% of the export obligation under the immediately preceding authorisation. Advance Authorisation holders will also be required to submit fortnightly performance reports to the Regional Authority, duly certified by an independent chartered accountant, covering all gold imports and exports undertaken under the scheme. Regional Authorities will in turn consolidate these into monthly reports submitted to DGFT headquarters for centralised oversight.
The five-note package converts what was previously a trust-based, volume-flexible exporter import mechanism into a compliance-heavy, quantity-restricted, and actively monitored channel.
The timing places these norms squarely within the broader policy architecture India has built in the seven weeks since the West Asia conflict escalated. India raised import duties on gold and silver to 15% from 6%, and on platinum to 15.4% from 6.4%, with effect from May 13, citing the need to protect macroeconomic stability, the current account, and foreign exchange reserves amid global uncertainty caused by the West Asia crisis. The hike reverses a duty cut introduced in the Union Budget 2024-25, when the external sector position was considerably more comfortable.
India’s average monthly gold import had risen to 83 tonnes in the first two months of 2026 from an average of 53 tonnes through 2025, placing substantial pressure on an already stressed current account at a time when crude oil import costs have simultaneously surged. The rupee hit an all-time low of 95.74 on May 12 before recovering marginally, and forex reserves have declined sharply in recent weeks.
Prime Minister Modi publicly called on Indians on the weekend of May 10-11 to voluntarily reduce gold jewellery purchases for a period of one year, framing the appeal as national economic participation rather than a mandatory restriction. That voluntary appeal was followed within 48 hours by the midnight duty hike notification, and now by the DGFT’s tightening of the Advance Authorisation framework — indicating that the government is layering demand-side appeals, fiscal disincentives, and trade licensing controls simultaneously.
The DGFT had already, effective April 1, shifted gold, silver, and platinum jewellery imports from the “Free” to the “Restricted” category under Chapter 71 of ITC (HS) 2022 — requiring importers to obtain prior DGFT approval, with no transitional relief and immediate effect. The May 14 notice now extends the tightening to the exporter-linked duty-free import channel, which had remained relatively untouched by earlier restrictions.
The Advance Authorisation scheme allows gems and jewellery exporters to import gold duty-free for use in manufacturing export goods. By capping the per-application quantity at 100 kilograms and mandating export obligation compliance before fresh authorisations are issued, the DGFT is effectively slowing the pipeline of duty-free gold entering the country even through the legitimate export-linked route — a channel that had grown significantly as commercial importers faced higher costs under the new 15% duty regime.
With the smuggling margin at the current duty level estimated at approximately ₹14 lakh per kilogram, authorities face the added challenge of ensuring that tighter formal-channel controls do not accelerate diversion to informal routes.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult a SEBI-registered financial advisor before making investment decisions.