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Just days after raising the import duty on gold from 6 percent to 15 percent, the government has now taken a significantly stricter measure. The Directorate General of Foreign Trade (DGFT) has substantially tightened the regulations governing the duty-free import of gold for gems and jewelry exporters. The primary objective of this decision is to rein in the country's continuously rising import bill. As importing gold from abroad becomes more expensive and difficult for large-scale traders, this will inevitably have a direct impact on gold supply within the local market, as well as on jewelry prices.

**New 100 kg Import Limit Imposed**
Under the new regulations, a maximum of only 100 kilograms of gold may now be imported against a single license under the Advance Authorization (AA) Scheme. The DGFT has implemented five new compliance rules for the Gems and Jewelry product group, effective immediately. If a trader is applying for an import license for the first time, the concerned Regional Officer will first conduct a physical inspection of their manufacturing unit. The officer will personally visit the site to verify whether the factory actually exists, assess its production capacity, and confirm whether manufacturing operations are currently underway. Import authorization will be granted only after this verification process is complete.

**Increased Scrutiny for Existing Exporters**
The path will no longer be easy for traders who are already availing the benefits of this scheme. A new license will be issued to an existing exporter only after they have fulfilled at least 50 percent of the export obligation stipulated under their previous license. This rule has been introduced to ensure that traders remain compliant with regulations and do not accumulate a backlog of unfulfilled export obligations. Furthermore, exporters are now required to submit a report every 15 days. This report must be certified by an independent Chartered Accountant (CA) and must provide a comprehensive account of both the gold imported and the exports executed. The Regional Officers will forward all such data to the DGFT headquarters on a monthly basis, thereby enabling centralized oversight of the entire process.

Why is the Government Continuously Taking Strict Measures?
The primary reason behind the government's increased stringency lies in record-breaking import figures. In the financial year 2025-26, India's gold imports surged by over 24 percent, reaching an all-time high of $71.98 billion. Although the *volume* of imported gold declined by 4.76 percent during this period—settling at 721.03 tonnes—the country's import bill skyrocketed due to a sharp surge in international gold prices. According to statistics, India procures nearly 40 percent of its total gold requirements from Switzerland alone. This is followed by the UAE (16 percent) and South Africa (10 percent). The government is continuously tightening regulations precisely to curb the outflow of the nation's capital.

Growing Concerns Among Jewelry Traders
These swift decisions by the government have significantly heightened the anxieties of those involved in the jewelry trade. The All India Gems and Jewellery Council has issued a response regarding these new restrictions and the hike in import duties. The Council has issued a clear warning that this sudden shift could lead to the proliferation of a "grey market." There is now a heightened risk of increased gold smuggling as individuals attempt to evade heavy taxation. Should this scenario materialize, customers, too, will need to exercise far greater vigilance than ever before regarding the purity and billing details when purchasing jewelry.

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