Shipments have been stuck at customs since the start of the financial year on April 1, ensnared by administrative bottlenecks and a lack of clarity over taxes, traders with direct knowledge of the matter said.
Lenders in India are no stranger to occasional hiccups in importing precious metals, but the current delays are risking a shortage in the local market. Jewelers are seeking to restock following the Akshaya Tritiya festival, an auspicious time to buy gold and silver.
“The duration of the import halt is unusual,” said Sunil Kashyap, managing director at trader FinMet Pte Ltd. The situation is getting tighter,” he added, as jewelers look to buy after the festival to take advantage of a drop in international prices.
International gold prices have fallen by around 12% since the end of February as the energy shock from the war in Iran spurred inflation and raised the risk of rate hikes, a negative for bullion as it doesn’t offer any interest. India imports most of its gold, and banks, along with trading houses and refineries, dominate purchases.
Lenders were unable to buy in the first half of April due to India’s trade ministry delaying the publication of its annual list of banks eligible to import precious metals. Since the list was issued on April 17, purchases haven’t been possible as the customs authority has yet to issue its own separate clearance order, which port and airport officials require before releasing incoming consignments.
Banks are also still seeking clarity on whether gold and silver will be exempted from the integrated goods and services tax, said traders, who asked not to be named discussing sensitive information. The metals had been exempt but it’s unclear whether that will continue, they said.India’s department of financial services and customs department didn’t immediately respond to an email seeking comment.
An official familiar with the matter said a customs notification was awaiting aproval and would be issued with a tax clarification, though details remain uncertain. The official asked not to be named as the information is sensitive.
BloombergWhile bullion demand had weakened due to surging international prices, the import delays have halted a large chunk of supplies and push up local prices. The premium of the domestic over the international price exceeded $20 an ounce this week for the first time since early February, according to the World Gold Council.
The only way to import bullion since the start of April has been via the India International Bullion Exchange, a platform in Gujarat International Finance Tec-City, Kashyap said. Flows via the bourse have skyrocketed, with April seeing the highest daily trading volumes in a year and May starting even stronger. However, importing through the IIBX takes longer and ties up working capital, the traders said.
The disruption in gold imports is likely to have a positive impact on the country’s trade balance, with bullion India’s largest import item after crude oil.
The import halt is “mildly positive for India’s trade balance and current-account deficit for April,” said Madhavi Arora, an economist at Emkay Global Financial Services. Gold’s share in the annual import bill has risen from an average of around 7% to above 9% in the financial year through March 2026, she said.