Import of gold and silver has stopped in IndiaImage Credit source: ai generated
At present, Indian banks have completely stopped importing gold and silver from abroad. The situation is such that many tonnes of gold and silver have arrived at the ports of the country, but are stuck there due to lack of approval from the Customs Department. That means new goods have stopped coming into the market from outside. Since India buys almost its entire gold and silver requirement from abroad (we are the second largest buyer of gold and silver in the world), this blockage is likely to create a shortage in the country’s bullion markets.
Why is gold and silver gathering dust at ports?
Actually, the Reserve Bank decides which bank in India can import gold and silver from abroad. The Directorate General of Foreign Trade (DGFT), working under the Ministry of Commerce, releases a list at the beginning of every financial year. The previous order came in April 2025, whose validity ended on March 31.
According to the rules, a new order should have come in the first week of April, but till now no new instructions have come from the government. Due to lack of order the customs department is not releasing the goods. According to bullion dealers of Mumbai, about 5 tonnes of gold and 8 tonnes of silver are stuck without custom clearance. Dealers say that until the old goods are not released, banks have also stopped placing new orders to foreign suppliers.
What will be the impact on the price of jewellery?
There is a simple rule of economics, when the supply of something in the market is less and the demand remains, then its price is sure to increase. According to India Bullion and Jewelers Association (IBJA), if the situation on imports is not cleared soon and the goods are not released, there will be a shortage of gold and silver in the market.
On big festivals like Akshaya Tritiya, when people go out for shopping, due to less supply, jewelers may charge heavy ‘premium’ (higher price than the fixed rate) from customers. At present, the market is functioning by selling old stocks and ETFs (exchange-traded funds), but this will not be able to meet the market demand in the long run.
Why has the government withheld approval?
Market experts believe that there may be a well-thought-out economic strategy of the government behind this. At present, the prices of crude oil, gas and fertilizers are skyrocketing in the global market, especially due to the Iran dispute. India has to import all this in large quantities from outside, due to which the country’s import bill is likely to increase significantly in April. In such a situation, the government probably deliberately wants to slow down the import of gold and silver to control the trade deficit and to handle the Indian rupee which is continuously weakening against the dollar. Officials have also recently asked refineries to reduce dollar purchases, so that the rupee can get support.
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