Kamal Ghorui
Banks have put a pause on fresh import orders for gold and silver from overseas suppliers. Large quantities of gold and silver are stranded at customs, as a formal government notification permitting bullion imports has yet to be issued, according to trade sources.Typically, the Directorate General of Foreign Trade, operating under the Ministry of Commerce and Industry, issues a notification at the beginning of each financial year specifying the banks authorised by the Reserve Bank of India to import gold and silver. The previous directive, released in April 2025, remained valid until March 31, and banks are currently awaiting a new order.The absence of new shipments could tighten domestic availability, given that India, the world’s second-largest consumer of gold and the largest buyer of silver, depends almost entirely on imports to meet demand, according to a Reuters report.Lower domestic demand may exert downward pressure on global bullion prices, while also helping to reduce India’s trade deficit and lend support to the rupee, which has been among the weaker Asian currencies this year.Officials have taken several steps to ease pressure on the currency, including recently advising refiners to limit spot dollar purchases.Banks had anticipated that the Directorate General of Foreign Trade would release its annual notification in early April, as is customary. However, with no announcement yet, more than five tonnes of gold remain held up at customs without clearance, according to a Mumbai-based bullion dealer at a private bank quoted by Reuters.The continued delay has created uncertainty, prompting banks to refrain from placing fresh orders with overseas suppliers, the dealer said.In addition, about eight tonnes of imported silver are also awaiting customs clearance, sources noted. Another bullion dealer pointed out that placing new orders makes little sense when earlier shipments are still stuck.India’s gold consumption declined to 710.9 metric tonnes in 2025, marking a five-year low, as per data from the World Gold Council. Meanwhile, inventories built from earlier imports are gradually being drawn down, with the market increasingly relying on sales from exchange-traded funds that are witnessing outflows, sources added.“There is a need to bring clarity and ensure imports resume,” said Surendra Mehta, secretary at the India Bullion and Jewellers Association.Mehta cautioned that continued disruption in imports could lead to supply shortages and push up premiums after Akshaya Tritiya, the country’s second-largest gold-buying festival.A bullion dealer based in Kolkata suggested that the government may be slowing imports to manage the trade deficit, as rising prices of oil, gas and fertilisers following the Iran conflict are expected to increase India’s import bill in April.
