Importing Gold Jewelry To India

Imports of the aforementioned gold jewelry rose from just 400 kg in January to 6 tons in May at a 1% tariff (gold is subject to a 10% customs duty).

Experts say if left unchecked, this could be a serious warning for jewelry manufacturers and bullion dealers in India. India has free trade agreements with various countries in Asia, including Malaysia, Indonesia, Cambodia, Myanmar, Singapore, Thailand, Vietnam, Brunei, Laos, and the Philippines.

According to Thomson Reuters, one of the world's leading economic experts, imports from Indonesia have continued since July 2014. Since May 2015, imports from Malaysia have also been recorded. The shipped gold is remelted and sold to local stores. Even after adding in financing costs and gold premiums in Indonesia, total transportation costs are only 3% of the local market gold volume. As a result, we support these retailers with a net difference of 7%.

Usually 22-carat gold is used to make jewelry, but manufacturers say 24-carat gold is also imported in the form of bangles, lockets, and necklaces.

In India, these can be converted back into gold bars and sold further. Experts said the jewelry sent in this way was being exported and would require customs inspection upon presentation of an invoice proving this sale. For some reason, the cargo is cleared only at Chennai, Kolkata, and Hyderabad ports.

The way to import jewelry with a 1% tariff was due to strict import rules for gold, such as the 80:20 plan, which increased the import duty on gold to 10% a few years ago and allowed exports of 20% of gold. Sometimes, it becomes acceptable. The value of all marketing shipments increases, and 80% remains in the local market. The AIGJTF (All India Gems and Jewelery Trade Federation) had told the government that transporting ready-made jewelry at 1% duty was an exception and needed to be rectified in the case of Indian artisans.

As a result, import duties on jewelry were raised to 15%. For imports from Asian countries that fall under free trade agreements, the tariff rate remained at 1%, but additional conditions were imposed, such as ``the need to present a certificate of origin and show a 20% price increase.'' After that, a 1% customs duty continued to be imposed on jewelry shipped from Thailand, but due to the way the guidance was written, a 20% increase was listed as an option. Subsequently, customs imposed heavy fines on jewelers for not complying with additional measures, temporarily resolving the import slump.

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