India bullion prices rise as gold import delays stretch

Banks have been unable to import gold and silver for nearly five weeks due to customs-related bottlenecks and uncertainty over tax treatment, creating supply concerns in the country’s bullion market and pushing domestic prices higher. The disruption began at the start of the new financial year on April 1 and has stalled shipments at ports and airports across India. Market participants say the delays are unusually long and could tighten supplies in the world’s second-largest bullion consumer. The tightening comes as jewellers look to replenish inventories after the Akshaya Tritiya festival, a period traditionally strong for gold and silver buying.

Traders note there is a lack of clarity on whether imports of gold and silver will continue to be exempt from the integrated goods and services tax (IGST). Complicating matters, the trade ministry initially delayed publishing the annual list of banks authorized to import precious metals; although the list was issued on April 17, authorities are yet to release a separate operational clearance order needed for consignments to move through ports. These questions surrounding eligibility and clearances are slowing transactions and adding to the price pressure in domestic markets.

International gold prices have already corrected sharply, dipping about 12% since late February as concerns about inflation and higher interest rates tempered demand. Still, India’s domestic bullion prices have risen as supply constraints bite, underscoring how logistics and policy ambiguities can translate into higher costs for consumers and traders alike. With imports forming a large portion of India's bullion needs, the current bottlenecks could keep local prices elevated until streamlining steps or tax clarity are put in place. Market watchers say it remains to be seen how quickly authorities will resolve the clearance and IGST questions, and whether flows will resume at previous speeds.

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