Connect with us

National News

India Tightens Silver Imports; Government Approval Now Mandatory For Silver Bars

Move Follows The Recent Import Duty Hike and Aims To Prevent Duty Arbitrage Through The India-UAE Trade Agreement While Protecting Foreign Exchange Reserves.

Published

on

India has introduced stricter controls on silver imports in a significant policy move aimed at preventing traders from exploiting a newly created duty differential following the government’s recent increase in import taxes on precious metals. The decision comes amid concerns that lower-duty silver imports through the India-UAE trade agreement could become a route to bypass higher tariffs imposed on bullion imports.

To address this issue, the government has shifted certain categories of silver imports from the “Free” category to “Restricted,” meaning importers will now require government approval and licensing before bringing silver into India. The move forms part of broader efforts to regulate precious metal inflows, protect foreign exchange reserves, and plug potential trade loopholes.

According to a notification issued by the Directorate General of Foreign Trade (DGFT) on May 16 through Notification No. 17/2026–27, silver bars under HS codes 71069221 and 71069229, including 99.9% purity silver bars, have now been brought under the restricted category with immediate effect. The new regulation also applies to silver alloys containing gold and platinum.

The policy revision follows the government’s earlier decision on May 12 to increase import duties on gold and silver from 6% to 15%, in addition to a 3% Integrated Goods and Services Tax (IGST) on bullion imports.

The concern emerged due to provisions under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which came into effect on May 1, 2022. Under the agreement, India is gradually reducing tariffs on silver imports from the UAE from 10% to zero over a ten-year period ending in 2031. At present, silver imports from the UAE attract a concessional tariff of 7%.

Before the recent duty hike, India’s standard silver import duty stood at 6%, leaving minimal incentive for traders to reroute imports through Dubai. However, after the increase to 15%, the gap between the regular tariff and the UAE’s concessional rate widened to eight percentage points, creating a strong financial incentive for traders to channel global silver shipments through Dubai.

Industry think tank Global Trade Research Initiative (GTRI) highlighted that the wider tariff gap could potentially trigger large-scale arbitrage-driven imports from the UAE. The new licensing requirement is therefore expected to provide the government with greater control over the quantity and timing of silver imports, while reducing the possibility of duty circumvention.

The restrictions, however, will not apply to 100% Export Oriented Units (EOUs), Special Economic Zones (SEZs), or companies importing silver under export-promotion schemes such as Advance Authorisation for products including jewellery manufacturing. These exemptions ensure that export-focused industries continue to have access to silver for production requirements.

Unlike silver, gold imports have not been moved into the restricted category as the potential tariff advantage under the UAE agreement remains relatively small at around 1%, reducing concerns over large-scale arbitrage activity.

The move also comes amid a surge in precious metal imports. India’s silver imports crossed $12 billion in FY2026, recording a significant 150% increase over the previous year. Meanwhile, gold imports rose by over 24% to a record $71.98 billion in FY2025–26, despite shipment volumes declining 4.76% to 721.03 tonnes.

The sharp rise in imports has added to government concerns, with the latest measures designed to curb non-essential imports, maintain tighter oversight over precious metal inflows and reduce pressure on foreign exchange reserves amid rising crude oil prices and continuing global geopolitical uncertainties.

Continue Reading
Advertisement JewelBuzz Banner
Click to comment
Subscribe
Notify of
guest
0 Comments
Oldest
Newest Most Voted

National News

NPCI Defers Rollout Of UPI Merchant Discount Rate Until After Diwali

Given Typical Retail Margins Of 2%–6% On Bullion and Plain Gold Jewellery, Absorbing A 0.4% Fee—Or Up To ₹300 Per Large Transaction—Would Have Directly Eaten Into Festive Profitability. The Deferral Keeps Bottom Lines Protected Through Dhanteras and Diwali.

Published

on

The National Payments Corporation of India’s (NPCI) UPI and Services Steering Committee has deferred the implementation of Merchant Discount Rates (MDR) on select person-to-merchant (P2M) UPI transactions until immediately after Diwali.

The move aims to protect consumer sentiment and keep operational costs steady for businesses during the peak festive shopping season. A specific implementation date will be announced separately.

Key Highlights

  • Festive Relief for Retail: The deferment ensures merchants face no additional payment processing costs during peak festive demand, helping avoid disruptions to consumer spending.
  • The Approved MDR Structure:
    • Applies only to eligible P2M transactions above Rs 2,000 at a rate of 0.4%.
    • Capped at Rs 300 for high-value transactions of Rs 75,000 and above.
    • Everyday low-value payments and small merchants remain fully exempt, preserving zero-cost digital transactions for general consumers.
  • Timeline Adjustment: Originally notified on September 15 for an October 15 rollout, the framework will now take effect post-Diwali, giving banks, payment aggregators, and merchants additional runway to align their systems and communicate terms clearly.

Jewellery purchase values routinely exceed the Rs 2,000 threshold and frequently touch or surpass the Rs 75,000 cap. Given typical retail margins of 2%–6% on bullion and plain gold jewellery, absorbing a 0.4% fee—or up to Rs 300 per large transaction—would have directly eaten into festive profitability. The deferral keeps bottom lines protected through Dhanteras and Diwali.

Introducing transaction fees just as footfall surges would have forced retailers to decide whether to absorb the cost or pass it on to buyers (via checkout surcharges or selective discounts). Avoiding this choice prevents awkward billing counter negotiations and cart abandonment during rush hours.

Continue Reading

Trending

JewelBuzz is Asia’s First Digital Jewellery Media & India’s No.1 B2B Jewellery Magazine, published by AM Media House. Since 2016, we’ve been the trusted source for jewellery news, market trends, trade insights, exhibitions, podcasts, and brand stories, connecting jewellers, retailers, and industry professionals worldwide.

We would like to hear from you...

GET WHATSAPP NEWS ALERTS

0
Would love your thoughts, please comment.x
()
x