Commerce Ministry Directs Customs, DRI To Monitor Gold And Silver Smuggling

The Indian government has stepped up monitoring efforts to prevent the smuggling of gold and silver following a recent increase in import duties on precious metals. The Commerce Ministry informed Parliament that Customs authorities and the Directorate of Revenue Intelligence (DRI) are maintaining strict surveillance after seizures of gold and silver increased significantly following the duty hike announced in May.

According to the ministry's response during Lok Sabha proceedings, gold seizures rose to 161 kg between May 13 and June 30, compared with 86 kg recorded earlier. Silver seizures also witnessed a sharp increase during the same period, reaching 536 kg after the government announced the revised import duty structure. The ministry said enforcement agencies have intensified checks to prevent illegal movement of precious metals into the country.

The increase in seizures came after the Centre doubled the import duty on gold, silver and platinum from 5% to 10% on May 13. The move was part of the government's broader strategy to discourage excessive imports of precious metals and reduce pressure on foreign exchange reserves amid global economic uncertainties and geopolitical tensions, including the ongoing conflict in West Asia.

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The revised duty structure also covers jewellery findings and industrial imports linked to precious metals. Gold and silver jewellery findings continue to attract a 5% customs duty, while platinum findings are subject to a 5.4% levy. The government has also adjusted customs rules for spent catalysts and ash containing precious metals, allowing a reduced import duty rate of 4.35% for materials that meet specific regulatory and compliance requirements to encourage recovery and recycling.

In addition to raising import duties, the government increased the base import prices of gold and silver through a notification issued by the Central Board of Indirect Taxes and Customs (CBIC) on June 15. The base import price of gold was raised to around $1,348 per 10 grams, an increase of about 0.37%, while the base import price of silver was increased by approximately $83 per kg to around $2,175 per kg.

The government has maintained that tighter monitoring by Customs and intelligence agencies is necessary to ensure compliance with the revised import regulations. With precious metals continuing to be a major component of India's import bill, authorities are focusing on curbing illegal trade while balancing domestic demand, industrial requirements and foreign exchange management objectives.

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