Silver import curbs in India: DGFT introduces licensing regime after duty hike

The Centre has tightened rules for silver imports by moving the metal to a licensed system. The change came soon after higher customs duties on precious metals. Under the revised policy, most inbound silver shipments now need prior government approval. Officials linked the steps to efforts to limit non-essential imports and reduce foreign exchange outgo.

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The Directorate General of Foreign Trade said the import policy for silver has shifted from free to restricted. The order also covers silver plated with gold and platinum. It applies "with immediate effect", as stated in a notification. Items listed as restricted can enter India only after importers obtain a government licence.

Silver import curbs and duty hike

The new curbs followed a duty increase announced on May 13. The government raised import duty on gold and silver from 6 per cent to 15 per cent. With 3 per cent IGST, the effective tax burden is over 18 per cent. The higher duty was aimed at limiting forex outflow by discouraging imports seen as non-essential.

The licensed regime does not cover all import channels. Imports by 100 per cent Export Oriented Units EOUs and Special Economic Zone SEZ units are excluded. This exemption applies only if the imported silver is not sold in the domestic market. Other importers must meet the new licensing requirement before shipments arrive.

Silver import curbs and import trends

Commerce ministry data showed sharp growth in silver purchases from overseas. Silver imports rose more than two-fold to USD 411 million during April. In 2025-26, imports jumped about 150 per cent to USD 12 billion, driven by higher prices. In volume terms, imports rose by 42 per cent to 7,334.96 tonnes in the last fiscal.

Domestic prices also stayed elevated, with silver at around Rs 2.53 lakh per kg. Industry use remained wide, which supports steady demand. Silver is used in electrical switches, solar panels, chemical catalysts and medical equipment. These applications often make the metal important for manufacturing supply chains.

Silver import curbs and forex reserves

The measures came as India’s foreign exchange reserves eased from earlier peaks. Reserves fell to USD 690 billion in the week ended May 1. This was down from the record USD 728.49 billion in the week ended February 27. The West Asia war was cited as adding pressure through costlier imports and a weaker rupee.

RBI data for the week ended May 1 also showed declines in key reserve components. India’s foreign currency assets FCAs slipped to USD 551.8 billion. Gold reserves fell to USD 115 billion. The government’s tighter import rules and higher duties align with efforts to manage import costs and preserve forex buffers.

With inputs from PTI