Indian banks have temporarily halted gold and silver imports amid delays in getting new government approvals, disrupting the flow of precious metals into the country and raising supply concerns ahead of the key holiday shopping season, Reuters reported.
The delay in imports will hit the supply of precious metals
The hiatus stems from the delay in issuing annual import permits by the Directorate General of Foreign Trade (DGFT), a routine process that allows nominated banks to import precious metals every financial year. The previous authorization expired on March 31, 2026, and a renewed directive has yet to be issued, prompting banks to delay placing new import orders, sources familiar with the matter told Reuters.
As a result, shipments that have already been ordered are experiencing problems. Several tonnes of gold and silver are reportedly stuck at customs clearance sites as banks await regulatory clarity before proceeding. The uncertainty effectively froze new inflows and tightened domestic availability.
India is one of the world’s largest consumers of precious metals, second only to China in demand for gold, and the world’s largest buyer of silver. The country relies heavily on imports to meet its needs, making it particularly vulnerable to supply chain disruptions. Even short-term delays can ripple through the market and affect prices, premiums and availability at the retail level.
The timing of the stop is especially important. It comes just weeks before Akshaya Tritiya, a major Hindu festival widely considered auspicious for buying gold and other valuables. Demand usually spikes during this period and jewelers stock up in anticipation of increased consumer interest.
A long interruption in imports could leave retailers scrambling to secure supplies, which could drive up local prices.
Market participants have warned that if the delay continues, premiums for physical gold could rise sharply as supply tightens. In such scenarios, buyers often turn to alternative channels, including recycled gold or financial instruments such as gold exchange-traded funds (ETFs). Indeed, some dealers have seen an increase in ETF redemptions as investors liquidate their holdings to meet physical demand in the absence of fresh imports.
Beyond the precious metals market, the situation could have broader macroeconomic implications. India’s gold and silver imports contribute to its trade deficit, as these commodities are largely purchased using foreign currency.
However, analysts caution that any such benefit would likely be short-lived if demand remained strong and imports resumed in a condensed time frame later this year. A sudden surge in imports to replace lost volumes could offset any temporary gains in the trade balance.
Industry stakeholders are now urging the government to speed up the approval process to avoid further disruption. Jewellers, traders and banks alike rely on predictable policy timelines to manage inventory and pricing strategies.
So far, there has been no official statement from the government explaining the delay or when a new permit would be issued.
(With inputs from Reuters)
