Gold Import for Trading by 4, 5 Star Export Houses Banned thru Nominated Agencies Window

The commerce ministry today imposed restrictions on import of gold by four and five star export houses by stipulating that they would cease to be nominated agencies.

Now, such export houses would be allowed to procure the precious metal only for their own use.

According to an official, the restrictions imposed by the Directorate General of Foreign Trade (DGFT) is aimed at curtailing gold imports, which has surged by more than two-fold to $ 16.95 billion during the first half of 2017-18.

“No nominated agency certificate shall be issued/ renewed for four star export house and five star export house status holders,” the directorate said in a notification.

Four and five star status are given to those export firms which have exported goods worth over $ 500 million and $ 2 billion, respectively, during the current and the previous two years.

It also said import of gold by four and five star houses with existing nominated agency certificate would be subject to actual user conditions. They would be permitted to import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of nominated agency certificate.

Nominated agencies are those which are authorised to import gold and sell to domestic entities.

Surge in gold imports has a direct impact on current account deficit.

[Ref: Notification No. 34/2015-2020 dated 18 October 2017]

Effect of this Notification: Henceforth no Nominated Agency Certificate shall be issued/ renewed for Four Star Export House and Five Star Export House status holders. Import of gold by Four Star and Five Star Houses with existing Nominated Agency Certificate is subjected to Actual user condition and are permitted to import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate.

Subject: Amendments in Foreign Trade Policy 2015-20

In exercise of powers conferred by Section 5 of FT (D&R) Act, 1992, read with paragraph 1.02 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central Government hereby makes following amendments in Foreign Trade Policy 2015-20.

1. Existing Para 4.41(iii) reads as under:

Four Star Export House from Gems & Jewellery sector and Five Star Export House from any sector may be recognized as Nominated Agency by Regional Authority.

2. Para 4.41(iii) is amended to read as under:

Notwithstanding any provision relating to import of gold by Nominated Agencies under Foreign Trade Policy (2015-2020), the import of gold by Four Star and Five Star Houses with Nominated Agency Certificate is subjected to actual user condition and are permitted to import gold as input only for the purpose of manufacture and export by themselves during the remaining validity period of the Nominated Agency certificate.