Duty-free gold imports: DGFT caps licences at 100 kg

What changed in DGFT’s May 14 public notice

The Directorate General of Foreign Trade (DGFT) has tightened the framework for duty-free gold imports used by gems and jewellery exporters. The changes were notified through a Public Notice dated May 14. DGFT inserted five new compliance notes under the Standard Input Output Norms (SIONs) for the Gems and Jewellery Product Group. These SION entries span M1 to M8, and the changes apply across all of them. The notice says the new conditions take effect immediately. The tightening specifically targets imports of gold under the Advance Authorisation (AA) scheme. Social media discussions have centred on how the changes convert a relatively flexible process into one with more checks and ongoing reporting. Reports also describe the move as part of stronger monitoring of gold inflows.

The 100 kg ceiling on gold per Advance Authorisation

The biggest operational change is a hard limit on the quantity of gold that can be imported duty-free under each authorisation. DGFT stated that AA for import of gold will be issued subject to a maximum permissible quantity limit of 100 kilograms. Multiple posts highlighted that earlier there was no such cap under the scheme. Under AA, exporters can import raw material such as gold without paying customs duty, subject to export-related conditions. The new cap applies per licence or per approval, as described in coverage and posts. The intent discussed online is that a quantity ceiling makes approvals easier to monitor and reduces the scope for very large duty-free imports under one document. The change is positioned as a monitoring measure, not a ban, because the scheme continues with added constraints. The cap is now a central data point investors and sector watchers are tracking.

Mandatory inspection for first-time applicants

A second major change is the treatment of first-time AA applicants for gold. DGFT has made physical inspection mandatory before an authorisation is issued to a new applicant. The inspection is to be carried out by the concerned Regional Authority (RA). The stated purpose is to verify the existence, capacity, and operational status of the manufacturing facility. Posts flagged this as an attempt to close gaps where paper-based applications could proceed without on-ground verification. The rule applies specifically at the application stage and only for first-time applicants. It effectively adds a lead-time and procedural layer before a new unit can start importing under AA. For companies, the requirement raises the importance of plant readiness and documentation ahead of filing.

Repeat licences linked to export performance: the 50% rule

For repeat applicants, the notice introduces a threshold condition that ties future approvals to past performance. Any subsequent AA for import of gold will be considered only after fulfilment of at least 50% of the export obligation prescribed under the preceding authorisation. Social media summaries describe this as a progressive compliance gate. The stated policy intent is to prevent the accumulation of unfulfilled obligations under the scheme. In practical terms, companies that rely on frequent authorisations will need to sequence imports and exports more tightly. The rule also changes how quickly a firm can obtain fresh authorisations if export obligations are lagging. Posts note that this link to export obligation is designed to ensure the duty-free channel remains tied to actual export activity. The 50% condition is now a key compliance checkpoint for established exporters.

Fortnightly CA-certified reporting and monthly oversight to DGFT

DGFT has also mandated a new reporting cadence for AA holders importing gold. Authorisation holders must submit a fortnightly performance report to the concerned RA. The report must be certified by an independent Chartered Accountant. It must detail gold imports and exports undertaken under the authorisation, as described in the notice and widely quoted excerpts. In parallel, RAs are required to submit a monthly consolidated report to DGFT headquarters. This monthly reporting is intended to enable centralised monitoring and policy oversight. Online discussions have focused on the higher compliance load and the need for tighter internal controls to match import-export records. The reporting framework creates a continuous audit trail rather than an end-of-cycle check.

Where the new conditions sit: SION M1-M8 and HBP 2023

The compliance notes have been inserted into the Handbook of Procedures 2023, according to the context shared across posts. They sit under SIONs M1 to M8 for the gems and jewellery product group. This matters because SIONs are the reference points for input-output norms used in export-linked schemes. By embedding the notes under these SION entries, DGFT has made the conditions applicable across relevant product categories covered by M1 to M8. The immediate-effect clause means there is no stated transition window in the materials shared. Posts also mention the Public Notice identifier and that it is signed at the DGFT level. For exporters, this placement signals that the conditions are procedural and compliance-driven, not a one-off advisory. For market observers, it indicates the tightening is structured into the operating handbook used for authorisations.

Policy backdrop highlighted in discussions

Several posts linked the May 14 tightening to a broader push to curb gold imports. Reuters cited the move as part of an effort to curb imports by the world’s second-largest consumer of the metal. Some coverage and posts also said the change came a day after the government significantly increased import duty on precious metals, described as a rise to 15% from 6% to discourage imports. Separately, one thread referenced that effective April 1, gold, silver, and platinum jewellery imports were shifted from “Free” to “Restricted” under Chapter 71 of ITC (HS) 2022, requiring prior DGFT approval. Within that backdrop, the May 14 notice extends tightening to the exporter-linked duty-free import channel. Online commentary framed this as an attempt to ensure duty-free gold is used for export manufacturing rather than being diverted. Another recurring point was pressure on the import bill and foreign exchange reserves, mentioned in social media summaries. The common thread across sources is tighter monitoring rather than removal of the scheme.

Quick table: what exporters must now do

The new requirements are being circulated online as a checklist for compliance teams. The table below summarises what is explicitly stated in the shared notice excerpts and reports.

What stock-market watchers are debating about the sector

The discussion around the change has been active because listed gems and jewellery exporters often depend on imported gold as an input. Posts are not treating this as an earnings event but as a policy and compliance shift that can change operating processes. The 100 kg cap per licence is being interpreted as a limit that could increase the number of licences needed by some exporters. The inspection requirement for first-time applicants is being seen as a higher barrier for new entrants into the export-linked duty-free channel. For existing exporters, the 50% export-obligation gate is being read as a constraint that could slow fresh authorisations if exports are delayed. The fortnightly CA-certified reporting is being discussed as an added administrative and audit workload. At the same time, the intent described in reports is stronger oversight and prevention of misuse or diversion. Investors tracking the sector are likely to watch how quickly exporters adapt operationally to the new cadence and checks, because the rules are effective immediately.