India, the world’s second-largest bullion market, has seen gold and silver imports grind to a halt for five weeks since April 1, driving domestic prices to a premium of over $20 an ounce above international levels for the first time since early February.
The disruption, caused by administrative bottlenecks and unresolved tax issues, has left shipments stranded at customs. Banks, key players in India’s gold trade alongside trading houses and refineries, faced delays after the trade ministry failed to publish its annual list of eligible importers until April 17. Even after the list was released, customs authorities have yet to issue clearance orders required by port and airport officials to release consignments. Adding to the uncertainty, traders report a lack of clarity on whether gold and silver will remain exempt from the integrated goods and services tax.
“The duration of the import halt is unusual,” said Sunil Kashyap, managing director at FinMet Pte Ltd. “The situation is getting tighter.”
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Jewelers, eager to restock after the Akshaya Tritiya festival—a peak period for gold purchases—are grappling with potential shortages. While international gold prices have dropped 12% since late February amid inflation pressures from the Iran conflict and looming rate hikes, the domestic supply crunch has offset any benefit from softer global rates.
As a workaround, imports have shifted to the India International Bullion Exchange in Gujarat, where trading volumes hit a one-year high in April and surged further into May. However, this route is slower and ties up working capital, adding pressure on market participants.
The import freeze could offer a silver lining for India’s economy. With bullion ranking as the country’s second-largest import after crude oil, the halt is expected to ease the trade balance, contributing to a mildly positive impact on the current-account deficit for April.
Gold’s share of the annual import bill has climbed above 9% in the financial year through March 2026.
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