Why Indian banks have stopped gold, silver imports
What's the story
Indian banks have temporarily halted gold and silver import orders from overseas suppliers. The move comes as a formal government order authorizing bullion imports is still pending, leaving tons of these metals stuck at customs. As the world's second-largest gold consumer and largest silver buyer, India heavily relies on foreign purchases to meet nearly all its demand.
Market implications
Potential impact on global gold and silver markets
The suspension of imports by Indian banks could have a major impact on the global gold and silver markets. The reduced demand from India, a major consumer, could push down prices internationally. However, it could also help narrow India's trade deficit and strengthen the rupee, which has been one of Asia's worst-performing currencies this year.
Regulatory delay
Why are imports halted?
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, usually issues an order at the start of each fiscal year. This order lists banks authorized by the Reserve Bank of India to import gold and silver. The last such order was issued in April 2025, valid till March 31, 2026. Banks are now waiting for a new DGFT directive.
Import freeze
Tons of bullion stuck at customs
The uncertainty over the timing of the DGFT order has led banks to suspend new import orders from overseas suppliers. A Mumbai-based bullion dealer at a private bank said over five tons of gold are stuck without customs clearance. Around eight tons of imported silver is also stuck without customs clearance, further complicating India's bullion supply situation.
Market reliance
Need for clarity and resumption of imports
The market is now relying on sales from exchange-traded funds, which are witnessing redemptions. Surendra Mehta, secretary at the India Bullion and Jewellers Association, stressed the need for clarity and resumption of imports. He warned that without imports, supply shortages would emerge and premiums would rise after Akshaya Tritiya, one of India's biggest gold-buying festivals.