New Delhi: In a move to curb duty evasion and close trade loopholes, the Indian government has imposed immediate restrictions on the import of gold, silver, and platinum jewellery from 10 Southeast Asian countries.
Importers will now require a mandatory license to bring such precious metal jewellery into the country.
The affected nations under the ASEAN (Association of Southeast Asian Nations) group include Thailand, Singapore, Vietnam, Indonesia, Malaysia, Myanmar, Cambodia, Laos, Brunei, and the Philippines. The government's notification, issued by the Directorate General of Foreign Trade (DGFT), stated that the decision takes effect immediately and applies retroactively to existing contracts, shipments already in transit, and even advance payments or irrevocable letters of credit.
The primary reason behind this crackdown is the widespread misuse of duty-free import provisions. Under the ASEAN-India Free Trade Agreement, jewellery imports from these countries were allowed at zero percent customs duty. In contrast, similar imports from other nations, including the UAE under the Most Favored Nation (MFN) clause, attract a 20 percent import duty. Traders were exploiting this differential by importing gold and platinum alloy jewellery through ASEAN nations, effectively bypassing taxes.
This is not the first such action. Earlier in February, the government had restricted imports of low-purity platinum jewellery (below 99 percent) after noticing that it was being used as a conduit to bring in gold duty-free.
The new rules also apply to Special Economic Zones (SEZs) and Export Oriented Units (EOUs). While these entities can still import such jewellery with a license, they are prohibited from selling these items in the Indian domestic market. The government's decisive action aims to protect the domestic jewellery industry, plug revenue leakage, and ensure a level playing field for honest taxpayers.