Govt revises wastage norms for gold and silver jewellery exports

The government has slightly relaxed the wastage norms introduced on May 27, following industry appeals for reconsideration. The new norms allow 2.25% wastage for handmade gold and platinum jewelry (down from 2.5%) and 3% for silver (from 3.2%). For machine-made jewelry, the wastage limit is 0.45% for gold and platinum and 0.5% for silver.

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The Directorate General of Foreign Trade (DGFT) has revised the wastage allowance norms for exporters of gold, silver, and platinum jewellery, effective January 1. This move tightens the permissible wastage during manufacturing to qualify for duty-free import of raw materials. The updated norms distinguish between handmade and machine-made jewellery for the first time, and they replace a more restrictive proposal from May that was postponed after industry pushback.

The wastage norms are the permissible amount of gold or silver that can be lost during the manufacturing process of jewellery for export.

Under the new Standard Input Output Norms (SION), allowable wastage for handmade gold and platinum jewellery has been reduced to 2.25% from 2.5%, and for silver jewellery to 3% from 3.2%. Machine-made gold and platinum jewellery will have a wastage limit of 0.45%, while silver is reduced to 0.5%. For studded jewellery, handmade pieces can have 4% wastage, while machine-made items are capped at 2.8%. The norms extend to idols, coins, medallions, and other items made of these precious metals.

These updated norms replace an earlier, stricter proposal issued in May, which faced industry pushback and was put on hold after extensive consultations. In May, the wastage allowance for plain gold and platinum jewellery was reduced from 2.5% to 0.5%, while for silver, it was cut from 3.2% to 0.75%. For studded jewellery, the wastage limit was lowered from 5% to 0.75% across gold, silver, and platinum.

The DGFT’s revised guidelines allow exporters to import precious metals duty-free, provided that the weight of the exported items matches the imported metal weight, minus the permissible wastage, to prevent excess metal from entering the domestic market.