Government Curbs Liquid Precious Metal Imports to Prevent Gold Smuggling

To strengthen its gold import regulations, the Indian government has taken decisive action to restrict the entry of certain forms of precious metals. This regulatory shift is designed to prevent the misuse of trade routes and product categories that previously allowed gold to enter the country discreetly, particularly in liquid form.

Government Moves to Regulate Colloidal Precious Metals

On June 19, the Directorate General of Foreign Trade (DGFT) announced that the import policy for items falling under Customs Tariff Heading (CTH) 2843 has been amended from "free" to "restricted," effective immediately. This classification includes colloidal precious metal substances where nanoparticles of gold or silver are suspended in liquid, and also covers both organic and inorganic compounds of precious metals.

As per news reports, certain importers had been taking advantage of this loophole to bring such goods into India from countries like Thailand. By classifying these items as "restricted," the government aims to reduce the likelihood of gold entering the domestic market illegally.

Restrictions Extended to Gold-Alloyed Palladium, Rhodium, and Iridium

In a separate notification, the DGFT also stated that imports of alloys containing Palladium, Rhodium, and Iridium with more than 1% gold by weight will now require special permissions. This added restriction further tightens the government's hold on alternative methods used to smuggle gold into the country.

This move comes against the backdrop of declining gold imports, which dropped by 3.82% during April and May of the current fiscal year, amounting to $5.64 billion. The policy revision is expected to support this downward trend and promote more transparent trade practices.

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Conclusion

The new restrictions reflect the Indian government’s continued efforts to maintain a transparent and lawful gold import system. By closing regulatory gaps and placing tighter controls on obscure import categories, authorities hope to safeguard the economy from the risks associated with smuggled precious metals.

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