The Indian government has recently introduced stricter regulations on the import of gold and silver under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). Only nominated agencies, qualified jewellers, and holders of valid Tariff Rate Quotas (TRQ) are now permitted to import these precious metals. This move aims to curb the misuse of CEPA benefits, particularly the exploitation of customs classifications to avoid higher duties.
A key element of these changes is the introduction of a specific harmonised system (HS) code for platinum with purity levels of 99 % or above. Imports qualifying under this category will be eligible for duty concessions under CEPA. Any other platinum alloys or compositions will no longer receive such benefits. This initiative follows the Budget announcement to create dedicated HS codes for precious metals, including gold dore, silver dore, and platinum, helping to enhance regulation and align duty structures.
Under the current CEPA framework, India permits the import of up to 200 metric tonnes of gold annually from the UAE at a reduced tariff rate. Through the TRQ system, importers can benefit from a 1 % duty concession. The new restrictions are designed to ensure that this quota is not exploited through the misclassification of precious metals.
Recent reports revealed that some importers were taking advantage of customs ambiguities by misdeclaring nearly pure gold as platinum alloy. This practice allowed them to enjoy the lower import duties applicable to platinum under CEPA. The tightened regulations and the new HS codes aim to close this loophole, preventing any further misuse of the agreement.
In light of these developments, the Gem and Jewellery Export Promotion Council (GJEPC) has urged the Commerce Ministry to diversify India’s gold import sources. The council has recommended shifting a portion of gold imports from Switzerland, which currently supplies 35 % of gold bars, to the United States. Similarly, for silver bars, the council suggests moving some imports away from the United Kingdom, which accounts for over 40 %, towards the US.
India’s trade with the US in gems and jewellery shows a significant surplus, with exports worth $11.58 billion compared to imports of $5.31 billion in 2024. The US represents over 20 % of India’s exports in this sector and nearly 13 % of overall trade. The GJEPC’s recommendations come amid concerns over potential trade pressure from the US administration, which has highlighted imbalances and proposed retaliatory tariffs.
The tightened import rules apply to various forms of gold and silver, including unwrought, semi-manufactured, and powdered materials. This comprehensive approach aims to regulate all major entry points for precious metals under CEPA and ensure compliance with customs and trade norms.
Read More: India Tightens Gold, Silver & Platinum Import Rules to Boost Transparency!
These regulatory updates reflect the government’s commitment to preventing duty evasion and maintaining the integrity of India’s trade agreements. The new HS codes and import restrictions under CEPA will help streamline the precious metals trade while addressing challenges posed by misclassification and misuse.
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Published on: May 23, 2025, 1:21 PM IST
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