Enquire Now

Please provide your details to reserve space at Guardian Vaults.

Do you agree to receive promotional emails from us?
Would you like to receive our guide to Gold and Silver Bullion?

Enquire Now

Please provide your details to reserve space at Guardian Vaults.

Do you agree to receive promotional emails from us?
Would you like to receive our guide to Gold and Silver Bullion?

Enquire Now

Please provide your details to reserve space at Guardian Vaults.

Do you agree to receive promotional emails from us?
Would you like to receive our guide to Gold and Silver Bullion?

Enquire Now

Please provide your details to reserve space at Guardian Vaults.

Do you agree to receive promotional emails from us?
Would you like to receive our guide to Gold and Silver Bullion?

Enquire Now

Please provide your details to reserve space at Guardian Vaults.

Do you agree to receive promotional emails from us?
Would you like to receive our guide to Gold and Silver Bullion?

Enquire Now

In a surprise move, the Indian government has eased import restrictions on gold, removing the nation’s 80:20 rule.

Introduced last year, the mandate required bullion importers to set aside at least one-fifth of the gold brought into the country so that it can be used for future export purposes.

The government targeted gold imports in an effort to bring the nation’s current account deficit under control.

Despite rumours that import restrictions would be lifted in the months ahead, the removal of the 80:20 rule still came as a shock to analysts, many of whom believed existing measures would remain in place until next year.

Tackling the deficit

Gold remains one of India’s most important import areas, with the commodity commonly bought and sold ahead of special events such as weddings and festivals.

However, the country produces very little of the yellow metal domestically, meaning demand for overseas gold is often high.

As such, the value of the nation’s imports typically exceeds the net worth of exported goods and services, leading to a significant current account deficit.

The 80:20 rule was just one of the measures implemented to reduce the deficit. Others included raising gold import taxes from 2 per cent to 10 per cent, as well as restricting the number of organisations allowed to bring the commodity into the country.

GJF welcomes announcement

The All India Gems and Jewellery Federation (GJF) lauded the government’s decision to abolish the 80:20 rule, expressing its gratitude to Prime Minister Shri Narendra Modi and officials at the Reserve Bank of India.

“We urge the government to initiate the process of creating a comprehensive gold policy and we shall support it wholeheartedly,” GJF Chairman Haresh Soni told the Times of India.

“We are hopeful that gold supply will be better now and lakhs of craftsmen will be able to get jobs. However, we urge the government to curb smuggling from neighbouring countries by reducing gold import duties.”

Gold smuggling in India

Illegal trade has become a problem in India, with criminals attempting to bypass taxes by sneaking gold across the border or through customs undetected.

Manish Jain, vice-chairman of the GJF, said the government should reduce import duties from 10 per cent to 5 per cent in the near future, with a view to lowering it to 2 per cent over the long term.

He argued that the hiked tax rate has created a parallel economy, where gold smuggling has surpassed 200 tonnes.

“Bringing down [duties] would eliminate smuggling and also the deployment of any black money for this process,” Mr Jain stated.

India Drops 80:20 Gold Bullion Import Rule

In a surprise move, the Indian government has eased import restrictions on gold, removing the nation’s 80:20 rule.

Introduced last year, the mandate required bullion importers to set aside at least one-fifth of the gold brought into the country so that it can be used for future export purposes.

The government targeted gold imports in an effort to bring the nation’s current account deficit under control.

Despite rumours that import restrictions would be lifted in the months ahead, the removal of the 80:20 rule still came as a shock to analysts, many of whom believed existing measures would remain in place until next year.

Tackling the deficit

Gold remains one of India’s most important import areas, with the commodity commonly bought and sold ahead of special events such as weddings and festivals.

However, the country produces very little of the yellow metal domestically, meaning demand for overseas gold is often high.

As such, the value of the nation’s imports typically exceeds the net worth of exported goods and services, leading to a significant current account deficit.

The 80:20 rule was just one of the measures implemented to reduce the deficit. Others included raising gold import taxes from 2 per cent to 10 per cent, as well as restricting the number of organisations allowed to bring the commodity into the country.

GJF welcomes announcement

The All India Gems and Jewellery Federation (GJF) lauded the government’s decision to abolish the 80:20 rule, expressing its gratitude to Prime Minister Shri Narendra Modi and officials at the Reserve Bank of India.

“We urge the government to initiate the process of creating a comprehensive gold policy and we shall support it wholeheartedly,” GJF Chairman Haresh Soni told the Times of India.

“We are hopeful that gold supply will be better now and lakhs of craftsmen will be able to get jobs. However, we urge the government to curb smuggling from neighbouring countries by reducing gold import duties.”

Gold smuggling in India

Illegal trade has become a problem in India, with criminals attempting to bypass taxes by sneaking gold across the border or through customs undetected.

Manish Jain, vice-chairman of the GJF, said the government should reduce import duties from 10 per cent to 5 per cent in the near future, with a view to lowering it to 2 per cent over the long term.

He argued that the hiked tax rate has created a parallel economy, where gold smuggling has surpassed 200 tonnes.

“Bringing down [duties] would eliminate smuggling and also the deployment of any black money for this process,” Mr Jain stated.

Disclaimers: Guardian Vaults Holdings Pty Ltd, Registered Office, Scottish House, 100 William Street, Melbourne, Victoria, 3000. ACN 138618176 (“Guardian Vaults”) All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from the publisher and/or the author. Information contained herein is believed to be reliable, but its accuracy cannot be guaranteed. It is not designed to meet your personal situation. Guardian Vaults, its officers, agents, representatives and employees do not hold an Australian Financial Services License (AFSL), are not an authorised representative of an AFSL and otherwise are not qualified to provide you with advice of any kind in relation to financial products. If you require advice about a financial product, you should contact a properly licensed or authorised financial advisor. The information is indicative and general in nature only and is prepared for information purposes only and does not purport to contain all matters relevant to any particular investment. Subject to any terms implied by law and which cannot be excluded, Guardian Vaults, shall not be liable for any errors, omissions, defects or misrepresentations (including by reasons of negligence, negligent misstatement or otherwise) or for any loss or damage (direct or indirect) suffered by persons who use or rely on such information. The opinions expressed herein are those of the publisher and/or the author and may not be representative of the opinions of Guardian Vaults, its officers, agents, representatives and employees. Such information does not take into account the particular circumstances, investment objectives and needs for investment of any person, or purport to be comprehensive or constitute investment or financial product advice and should not be relied upon as such. Past performance is not indicative of future results. Due to various factors, including changing market conditions and/or laws the content may no longer be reflective of current opinions or positions. You should seek professional advice before you decide to invest or consider any action based on the information provided. If you do not agree with any of the above disclaimers, you should immediately cease viewing or making use of any of the information provided.