Indian banks halt gold, silver imports amid delay in government clearance, sources say

MUMBAI: Indian banks have halted gold and silver import orders from overseas suppliers, with tons of the metals stuck at customs as a formal government order has not been issued authorising bullion imports, trade sources said.

Without fresh imports, India could face supply shortages, as the world’s second-largest gold consumer and biggest silver buyer relies on overseas purchases to meet nearly all its demand.

Weak Indian demand could weigh on global gold and silver prices, while narrowing the country’s trade deficit and supporting the rupee, which has been among the worst-performing Asian currencies so far this year.

Authorities have carried out various measures designed to reduce pressure on the currency, including most recently urging refineries to curb their spot dollar purchases.

The halting by Indian banks of gold and silver import orders from overseas suppliers and the tons of the metals stuck at customs due to the absence of a formal government order authorising bullion imports have not been previously reported.

The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce and Industry, typically issues an order at the start of each financial year listing banks authorised by the Reserve Bank of India to import gold and silver.

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The previous order, issued in April 2025, was valid until the end of the last financial year on March 31 and banks are now awaiting a fresh DGFT directive.

The DGFT did not immediately respond to a Reuters request for comment.

Banks expected the DGFT to issue the order in early April, as it does every year, but with no update so far, more than 5 tons of gold are stuck without customs clearance, said a Mumbai-based bullion dealer at a private bank.

Uncertainty over the timing of the DGFT order has led banks to halt new import orders from overseas suppliers, said the dealer, who did not want to be named as he was not authorised to speak to the media.

Around 8 tons of imported silver is also stuck without customs clearance, the sources said.

There is no point in placing new orders when earlier consignments cannot be cleared, another bullion dealer said.

India’s gold demand in 2025 fell to 710.9 metric tons, the lowest level in five years, according to the World Gold Council.

Gold and silver inventories from previous months’ imports are experiencing drawdowns, with the market now relying on sales from exchange-traded funds, which are seeing redemptions, the sources said.

“There is a need to bring clarity and ensure imports resume,” said Surendra Mehta, secretary at the India Bullion and Jewellers Association.

Without imports, supply shortages will emerge and premiums will rise after Akshaya Tritiya, Mehta said, referring to the second-largest gold-buying festival in India.

As the Iran conflict has pushed up prices of oil, gas and fertiliser, India’s import bill is likely to rise in April, which may have prompted the government to slow gold and silver imports to contain the trade deficit, said a bullion dealer in Kolkata.‑Reuters