India’s jewellery exporters woke up this week to a more restrictive gold-import regime. The Directorate General of Foreign Trade (DGFT) has revised the rules governing duty-free bullion imports under the Advance Authorisation (AA) scheme, signalling a tougher enforcement approach towards the sector.
What Has the DGFT Changed?
Duty-free gold imports under each Advance Authorisation licence are now capped at 100 kgs.
Exporters must complete at least 50% of previous export obligations before receiving a fresh licence
Physical inspection of manufacturing units is mandatory for first-time applicants
Import and export activity must be reported every fortnight
Reports must be certified by chartered accountants
DGFT regional offices will submit monthly monitoring reports for central oversight
For many exporters, the circular reads less like a routine procedural amendment and more like a warning shot! The government is attempting to prevent misuse of gold imports after the recent hike in customs duties and agricultural cess pushed the effective levy on bullion back to around 15%.
The changes matter because the AA scheme is central to India’s jewellery-export ecosystem. It allows exporters to import gold without paying import duty, provided the metal is eventually converted into jewellery for export. The new rules tighten that pipeline considerably.
#1 The 100 kgs. cap per licence
The most immediate operational change is the restriction on duty-free gold imports to 100 kilograms per Advance Authorisation licence.
Previously, large exporters could import substantially higher quantities depending on export commitments and operational scale. The cap effectively fragments procurement into smaller authorisations.
For major manufacturers, this means more paperwork, more licence applications and potentially slower production cycles. Companies accustomed to bulk bullion procurement may now need to restructure inventory planning and hedging strategies.
Smaller exporters could also face higher administrative costs per shipment.
#2 No new licence until 50% export obligation is fulfilled
Under the revised rules, exporters must first complete at least 50% of the export obligation attached to an earlier licence before becoming eligible for a fresh authorisation.
The measure directly targets companies that continuously rolled over licences while importing fresh bullion.
The impact on cash flow could be significant. Jewellery exporters often operate on long receivable cycles, especially in the American and Middle Eastern markets. Delayed payments from overseas buyers may now slow access to fresh gold imports.
In practical terms, the government is linking future bullion access to demonstrated export performance rather than projected orders.
#3 Physical inspection for first-time applicants
The DGFT has also mandated physical verification of manufacturing premises for first-time applicants under the scheme. Officials will inspect factories before granting import permissions, ostensibly to ensure that applicants possess genuine manufacturing capacity.
The provision appears aimed at shell entities or trading operations masquerading as exporters. Yet it could also lengthen approval timelines for smaller firms, particularly those operating through subcontracted manufacturing networks common in cities such as Mumbai, Surat and Kolkata.
#4 Fortnightly reporting certified by chartered accountants
Exporters must now submit import and export data every two weeks, certified by chartered accountants.
This substantially increases compliance frequency. Earlier reporting systems were comparatively less intensive.
For organised players with sophisticated ERP systems, the change may be manageable. Mid-sized family-run jewellery businesses, however, could struggle with the added documentation burden.
The requirement also increases legal accountability. Chartered accountants certifying inaccurate declarations could themselves face scrutiny.
#5 Monthly monitoring by DGFT regional offices
DGFT regional offices will now submit monthly monitoring reports to headquarters, creating a centralised surveillance mechanism for bullion movement under the AA scheme.
This suggests the government is moving away from a trust-based export facilitation model towards real-time monitoring of gold flows.
#6 A policy shift, not merely a procedural tweak
Taken together, the measures reveal a broader policy shift. The Indian state increasingly views gold not merely as a trade commodity but as a macroeconomic risk tied to the current-account deficit, currency stability and potential smuggling.
For exporters, the message is blunt: duty-free bullion access will now come with far tighter scrutiny.
India’s jewellery industry has long thrived on speed, flexibility and relationship-driven trading. The DGFT’s new framework introduces something less familiar to the sector—continuous regulatory supervision.
