The Directorate General of Foreign Trade (DGFT) has recently implemented new import restrictions through two significant notifications (No. 18/2025-26 and No. 19/2025-26, dated June 17, 2025). These measures, initiated by the Ministry of Commerce and Industry, specifically target the use of gold in alloys and compounds, aiming to tighten controls on gold imports and curb smuggling activities.
Alloy Restrictions (CTH 7110)
One of the most notable changes involves the restriction on imports of palladium, rhodium, and iridium alloys that contain over 1% gold by weight. This policy aligns with earlier restrictions on platinum alloys introduced in March 2025. By limiting the import of these alloys, the DGFT aims to close loopholes that have been exploited for illicit gold trade. The new regulations ensure that only those alloys with minimal gold content can be imported freely, thereby reducing the risk of gold being misrepresented in international trade.
Colloidal Precious Metals (CTH 2843)
Another significant shift is the change in the trade status of colloidal metals—liquid suspensions of gold or silver nanoparticles. Previously classified as free for import, these colloidal metals are now restricted. This adjustment addresses a critical loophole that has been used for smuggling gold disguised as “liquid.” By imposing restrictions on colloidal precious metals, the DGFT aims to enhance the integrity of the gold import framework and prevent illegal activities that could undermine the economy.
Industry Flexibility Maintained
Despite the new restrictions, the DGFT has ensured that alloys containing less than 1% gold remain permissible for import without any restrictions. This provision is crucial for various industrial sectors, including electronics, automotive, specialty chemicals, and electrical equipment. These industries can still import restricted items with DGFT authorization, thereby minimizing disruptions to legitimate supply chains. This balance between regulation and industry needs is essential for maintaining economic stability.
Strategic Intent & Market Impact
Closing Smuggling Loopholes
The new policies are particularly focused on closing smuggling loopholes that have allowed mislabelled imports to enter the country, especially through countries like Thailand. In these cases, gold was often disguised within colloidal compounds or alloy mixtures, making it difficult for authorities to track and regulate. By tightening these regulations, the DGFT aims to enhance the effectiveness of its enforcement mechanisms and deter illicit trade.
Policy Alignment
The expansion of restrictions from platinum to other precious metals ensures consistent regulatory coverage across CTH 7110. This alignment not only simplifies compliance for businesses but also strengthens the overall regulatory framework governing precious metals in India.
Gold Trade Trend
India’s gold imports have surged by an astonishing 27%, reaching US $58 billion in FY24. This significant increase has prompted the government to implement tighter controls to manage the growing demand for gold while safeguarding the economy from potential illegal activities. The new restrictions are a proactive measure to ensure that the influx of gold does not lead to adverse economic consequences.
Summary of Policy Changes
Policy Area
Status
Conditions
Alloys (>1% gold)
Restricted
Import allowed with DGFT authorization for industrial use
Alloys (<1% gold)
Unrestricted
No changes; free import continues
Colloidal metals (CTH 2843)
Restricted
Requires DGFT license for industrial users
Conclusion
India’s recent import restrictions reflect a balanced approach to tightening controls on gold imports while ensuring that crucial industrial sectors continue to receive necessary raw materials. By addressing smuggling concerns—especially through innovative chemical routes—the government reinforces its vigilance against illicit trade. At the same time, it maintains economic momentum in key manufacturing domains, ensuring that legitimate businesses can thrive within a regulated framework. This strategic move not only protects the economy but also enhances the integrity of India’s gold trade.
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