India on Wednesday restricted imports on plain gold jewellery, as the world’s second-largest consumer of the precious metal tries to plug loopholes in its trade policy. Import of articles of gold have been put under the restriction category from the free category, a government notification said, adding that import under the India-United Arab Emirates Comprehensive Economic Partnership Agreement would be allowed without any license.
The Ministry of Commerce and Industry did not immediately respond to a request for comment. The move comes as importers over the last few months have been using a policy flaw to source plain gold jewellery from Indonesia without paying any import taxes.
“Indonesia was never a gold jewellery supplier to India, but in the last few months, bullion dealers imported 3-4 tonnes from Indonesia without paying any import taxes,” said a Mumbai-based dealer with a private bullion importing bank.
India levies a 15% tax on gold imports. “Many dealers got to know about the loophole, and they were also trying to source from Indonesia. The policy change has closed that loophole,” he said.
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