In a decisive regulatory move aimed at tightening oversight on India’s gold trade, the government has amended export compliance norms for jewellery manufacturers under the Advance Authorization Scheme, closing long-standing loopholes that allowed misuse of duty-free imports. The latest amendment, issued by the Directorate General of Foreign Trade (DGFT), seeks to ensure that gold imported duty-free is genuinely used for export production and not diverted into the domestic market.

A Closer Look at the New Rules

Under the revised guidelines, exporters will now be required to fulfil their export obligations within 120 days from the date of import of each consignment. This new, uniform timeline replaces the earlier flexible window that often led to advance stocking and delayed exports.

Crucially, the DGFT has also made it clear that no extensions will be granted beyond this 120-day period, bringing stricter accountability to the system. This effectively aligns the policy with the Foreign Trade Policy (FTP) 2023, which emphasizes streamlined trade procedures, better monitoring mechanisms, and transparent compliance.

The intent is clear — to ensure that the scheme’s benefits are reserved for genuine exporters and to curb speculative imports that distort trade figures and impact the current account deficit.

Why the Move Matters

The decision comes against the backdrop of an alarming rise in gold imports. In September 2025, India’s gold imports nearly doubled to $9.6 billion, up from $4.6 billion in August, driven by festive demand, rising consumer appetite, and speculative buying amid global price volatility.

This surge contributed significantly to the widening of India’s trade deficit, which ballooned to a 13-month high of $32.15 billion. With gold consistently ranking among India’s top import commodities — alongside crude oil and electronics — unchecked inflows have long been a source of concern for policymakers.

By tightening deadlines and plugging procedural gaps, the government aims to deter misuse of the advance authorization scheme, which permits import of raw materials, including gold, without payment of customs duty for manufacturing export products.

Industry Implications

The jewellery industry — which exports nearly $30 billion worth of gold and diamond jewellery annually — will now need to recalibrate its operational timelines and supply chain planning. The 120-day cap compels exporters to adopt a “just-in-time” approach, minimizing idle gold inventory and ensuring faster production cycles.