India Bans Gold Exports Above 22 Carats

New Delhi: India has banned the export of gold products with purity above 22 carats with immediate effect to curb irregularities in the trade.

The Directorate General of Foreign Trade issued a notice limiting shipments of jewellery, coins and medallions to 22 carats or below, without giving a reason.

“The move may be to reduce round-tripping of jewellery and coins, wherein a trader can import the gold coins or jewellery at a lower import tax because of trade agreements with some countries and re-export the same stock without any value addition,” said Ketan Shroff, joint secretary of the India Bullion and Jewellers Association (IBJA).

The exporters would benefit from not paying the 10% import tax currently levied on most inbound shipments of gold, he said.

Indian imports are said to have more than doubled last month from a year ago partly due to a jump in purchases from South Korea, with which India has a free-trade agreement (FTA). Importers have previously used free-trade treaties with countries such as Thailand and Indonesia to escape the import duty.

Gold medallions and coins made up 15% of the country’s total gems and jewellery exports by value in the financial year ended March, according to data from the Gem & Jewellery Export Promotion Council (GJEPC).