Page 33 - Bullion World Issue 11 Volume 05 November 2025

Bullion World | Volume 5 | Issue 11 | November 2025

Customs and Foreign Trade Challenges in Bullion
Imports: A Deep Dive

The Global Storm and Its Local Ripples
Gold, by its very nature, easily traverses geographic
borders, making India’s trade and regulatory
ecosystem especially sensitive to global events.
Mr KP Singh’s address underscored how global
uncertainties—ranging from US sanctions and tariffs
to the breakdown of postwar multilateral systems like
the WTO—have upended supply chains, triggered
commodity price surges, and spurred increased
defensive policy actions by national governments.

This volatility particularly affects bullion inflows,
balance of payments, foreign exchange reserves, and
even perceptions of gold as a strategic asset class
rather than a mere consumption good. The recent
surge in gold and silver prices, for instance, was
largely attributed to geopolitical turmoil and erratic
international trade policies, further complicating
the work of bullion importers who rely on trade
predictability and regulatory coherence. Mr K.P. Singh

The Multilayered Customs Puzzle
Customs procedures for bullion imports in India are
far from straightforward. Multiple import routes—free
trade agreements (FTAs), concessional duty programs • Public notice loopholes: Past episodes saw, for
for Least Developed Countries (LDCs), and open example, “gold findings” (jewellery components)
general licenses—come with their own complex imported duty-free at exaggerated volumes until
eligibility requirements and terms. the loophole was closed.

One notorious pain point is adherence to “country of Each of these issues translates directly into commercial
origin” rules. Amendments to customs law in 2020 headaches—detentions, working capital blockage,
introduced stricter proof-of-origin requirements, litigation, and damage to business reputation—and
where a mere certificate is not always sufficient: Indian highlights the urgency of both regulatory clarity and
customs authorities may now reject documents or industry-wide compliance.
deny benefits if verification fails or doubt arises about
authenticity. Smuggling, Security, and New Enforcement
Paradigms
Disputes commonly arise in: Regulatory complexity has, at times, fostered parallel
channels for bullion inflow. Traditionally driven by profit,
• Calculation of value addition for FTAs: If the smuggling in gold has recently become enmeshed with
mandatory threshold (often 35%) is incorrectly national security risks. Cases in Kerala and Jammu
computed, goods can be delayed or confiscated. & Kashmir have invoked not just anti-smuggling
• LDC certification: Many shipments from LDCs statutes but also anti-terror laws, as gold smuggling
face denials when the declared export volumes proceeds are suspected of funding unlawful activities.
far exceed the producing country’s total The judiciary’s evolving interpretation—classifying
output, indicating possible document fraud or gold smuggling as a more serious, even anti-national,
misdeclaration. offense when linked to terrorism—signals a shift in

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