India’s Gold Scrutiny Deepens: Licence Caps, UAE Trade Under Scanner

Indian government imposed restrictions on the import of gold under advance authorisation to 100 kg per licence on May 14, Business Standard reported citing a report from the Directorate General of Foreign Trade (DGFT).

This development comes a day after raising custom duties on gold imports to 15% from 6% to discourage imports of the yellow metal, amplifying efforts to support the rupee. The latest restrictions are applicable on duty-free import of the yellow metal by exporters under a special scheme-advance authorisation. India’s gold imports had risen 24% to $71.98bn in FY26.

The government has also tightened oversight of gold imports under the advance authorisation scheme.

According to the notice cited by Business Standard, companies using an advance authorisation licence, a licence that lets them import gold without paying full customs duty upfront, will now have to export at least 50% of what they promised before they can get another import licence.

First-time applicants will also face mandatory physical inspection by regional authorities before getting approval. They will also need to send updates every two weeks showing how much they are importing and exporting.

In addition, these regional trade offices will send monthly detailed reports to the DGFT so the government can closely track all gold import-export activity.

Alongside domestic tightening of import rules, authorities are also stepping up scrutiny of gold inflows routed through key trade partners such as the UAE.

India Steps Up UAE Gold Scrutiny

India may accelerate scrutiny of certificates of origin accompanying gold imports from the United Arab Emirates (UAE) amid concerns that importers could increasingly use the concessional duty route. This comes after the recent hike in gold import duties, according to Moneycontrol.

Indian authorities are in touch with agencies and officials in the UAE to probe the authenticity of certificates of origin issued for gold exports to India under the bilateral trade agreement framework, reported Moneycontrol.

“The process of verification of the certificate of origin of the gold exported out of the UAE is ongoing,” one of the people aware of the matter said, adding that agencies in both countries are in constant communication as part of the exercise.

Under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), only products that meet the prescribed origin criteria are eligible for tariff concessions. However, trade policy analysts and government authorities have raised concerns that precious metals imported into the UAE from other countries may undergo limited processing before being re-exported to India. This has led to demands for stricter checks and tighter enforcement of origin norms.