Indian Banks Suspend Gold and Silver Imports Amid Government Delays
Indian banks have halted all new orders for gold and silver imports from international suppliers, causing substantial amounts of these metals to be stranded at customs. This pause is due to the absence of an official government directive that permits bullion imports, as confirmed by trade sources. As the second-largest consumer of gold and the largest buyer of silver globally, India relies almost entirely on overseas purchases to satisfy its demand, which now faces potential shortages.
The lack of imports could have repercussions for global gold and silver prices, potentially leading to a decline in demand from India. This situation could also help narrow the trade deficit and strengthen the Indian rupee, which has been struggling among Asian currencies this year. In response to currency pressures, authorities have introduced several measures, including encouraging refineries to limit their dollar spot purchases.
Typically, the Directorate General of Foreign Trade (DGFT) issues an order at the beginning of the financial year, listing the banks authorized by the Reserve Bank of India to import gold and silver. The last directive was issued in April 2025, and banks are now awaiting a new order. With no updates forthcoming, over five tons of gold and around eight tons of silver remain stuck without customs clearance, leading dealers to express frustration over placing new orders under these conditions. Surendra Mehta, secretary of the India Bullion and Jewellers Association, emphasized the need for clarity to resume imports, warning that supply shortages and rising premiums may follow the Akshaya Tritiya festival, which is one of India's major gold-buying events.
As global conflicts have driven up prices for oil, gas, and fertilizers, India's import bill is expected to increase in April. This may have prompted the government to slow the imports of gold and silver in an effort to manage the trade deficit, according to a bullion dealer in Kolkata.
