India tightens gold and silver imports under CEPA to curb misuse

India has imposed restrictions on gold and silver imports in specific forms to curb the misuse of trade benefits under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The decision, aligned with the Budget FY26 announcement, seeks to stop the practice of importing gold disguised as platinum alloys to take advantage of lower customs duties.

In a decisive step to curb misuse of trade concessions under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), the Indian government on Monday imposed fresh restrictions on the import of gold and silver in unwrought, semi-manufactured, and powdered forms. The new rule mandates that such imports can now be undertaken only by nominated agencies, qualified jewellers, and valid holders of the Tariff Rate Quota (TRQ) granted under CEPA.

The move is part of the government’s broader strategy, as announced in the Union Budget for FY26, to streamline customs procedures and introduce new HS codes for key precious metals like gold dore, silver dore, and platinum containing at least 99% purity. This measure is aimed at plugging loopholes that some importers had been exploiting to evade higher customs duties.

According to officials, certain importers were routing nearly pure gold—containing up to 99% gold—from Dubai and declaring it as a platinum alloy to benefit from lower duties under the CEPA framework. Platinum and its variants were given preferential treatment under CEPA, enabling unscrupulous players to import gold in disguise and sidestep duty structures.

To block this malpractice, the government introduced a specific HS code exclusively for platinum with 99% or more purity. Only this category will now be eligible for duty concessions under CEPA. Imports under other compositions of platinum will not qualify for the benefits, effectively sealing the loophole that allowed gold to be passed off as platinum.

“This measure follows the Budget announcement to create separate HS codes to ensure that gold imports don’t happen in the name of platinum,” said a senior official. “The alignment of HS codes with import regulations brings consistency between customs duty policy and actual trade practices.”

The restrictions underscore India’s attempt to protect its domestic industry and revenue by ensuring that the CEPA’s benefits are used only for genuine trade and not for circumvention of customs duties. It also demonstrates a calibrated approach to regulating high-value imports, which directly impact the country’s trade balance and foreign exchange reserves.

As per the CEPA, India has agreed to allow import of up to 200 metric tonnes of gold annually from the UAE with a 1% tariff concession under the TRQ mechanism. However, these imports are subject to strict monitoring and can only be carried out by eligible entities.

With these new controls in place, the government aims to tighten oversight of precious metal imports, prevent revenue leakage, and ensure fair trade practices. The introduction of dedicated HS codes for each metal and purity level marks a significant step in enforcing discipline in the import regime while upholding the spirit of the India-UAE economic partnership.