MUMBAI, July 12 (Reuters) – India on Wednesday restricted imports of plain gold jewellery as the world’s second-biggest consumer of the precious metal tries to plug loopholes in its trade policy.
Imports of gold articles have been moved from the free category to the restricted category, a government notification said, adding that imports under the India-United Arab Emirates Comprehensive Economic Partnership Agreement would be allowed without a licence.
The Ministry of Commerce and Industry did not immediately respond to a request for comment.
The move comes after importers took advantage of a policy flaw in recent months to source plain gold jewellery from Indonesia without paying import taxes.
“Indonesia has never been a supplier of gold jewellery to India, but in the last few months, bullion dealers have been importing 3-4 tonnes from Indonesia without paying any import duty,” said a Mumbai-based dealer with a private bullion import bank.
India levies a 15% tax on gold imports.
“A lot of dealers got wind of the loophole and tried to source from Indonesia too. The policy change has closed that loophole,” he said.
