
New Delhi: The government has tightened export compliance for jewelery makers under the advance clearance scheme to reduce procedural loopholes amid soaring gold imports, a key factor behind the latest surge in India’s trade deficit. The Directorate General of Foreign Trade (DGFT) has aligned the export timetables with the Foreign Trade Policy (FTP) 2023, which requires exporters to meet their obligations within 120 days of importation, removing any scope for extension.
The move comes as India’s gold imports nearly doubled to $9.6 billion in September from $4.6 billion a month earlier, boosted by holiday demand and speculative buying. India’s trade deficit shot to a 13-month high of $32.15 billion in September, largely due to imports of precious metals.
By enforcing firm deadlines, the DGFT seeks to discourage pre-warehousing, tighten monitoring and ensure that duty-free imports actually feed exports in an industry that still brings in nearly $30 billion a year.
The move closes a procedural loophole that allowed exporters to extend deadlines or store gold imported duty-free instead of using it for exports. By enforcing firm deadlines, the government seeks to tighten oversight, prevent abuse and ensure duty-free imports serve their intended purpose, supporting real export production amid record precious metal prices and soaring import volumes.
According to the change notified by the DGFT, exporters have to fulfill their export obligation within 120 days from the date of importation of each consignment against the permit. For articles such as gold, platinum and silver clasps and mounts used in the manufacture and export of jewellery; the period remains 180 days from the date of importation.
Revised paragraph 4.84(b) of the Manual of Procedures (HBP) 2023 states that advance permit holders may import gold as replenishment after completing their exports. As per the DGFT order, the amendment was introduced to bring the manual in line with paragraph 4.36(a) of the FTP and to ensure that both documents contain the same procedural provisions.
A senior DGFT official in the know said the earlier wording of the rule caused confusion in implementation and created procedural discrepancies between the manual and the trade policy document. “The intention has always been clear: the export obligations under advance authorization must be fulfilled within 120 or 180 days depending on the product category. This notification simply removes any ambiguity,” the official said.
However, the timing of the clarification has drawn attention. India’s gold imports rose sharply in September, driven by holiday demand and speculative buying, even as global gold and silver prices hit record highs, the latest government data showed. Gold imports doubled to $9.6 billion in September from $4.6 billion in August. In terms of quantity, imports rose to 102 tonnes in September from 61 tonnes in August.
Industry representatives said the clarification will help exporters plan production and supply more effectively. “Uniform timelines facilitate compliance and reduce scope for interpretational disputes. Exporters now know exactly when the commitment period begins and ends,” said Surendra Mehta, national secretary of India Bullion and Jewelers Association.
The move is also expected to discourage pre-stocking and prevent gold hoarding as importers will now be able to supply stocks only after meeting their export obligations, Mehta said.
The advance authorization regime allows exporters to import duty-free inputs for the production of products intended exclusively for export. Exporters must fulfill their export obligations within a specified period to demonstrate that the imported goods have actually been used in the production of the exported goods.
The gems and jewelery industry, which contributed USD 29.80 billion to India’s exports in FY25, remains one of the largest users of the scheme. Although exports from this labor-intensive industry have declined from USD 32.70 billion in FY24, it remains a major source of employment, providing work to around 5 million people.
After a relentless climb to new heights that saw the cross of 24 carat gold ₹1.27 lakh per 10 grams ahead of Diwali on October 18, prices of the precious metal took a breather and were at ₹1.22 lakh for 10 grams on October 24.





