A few bullion dealers and jewellers are exploiting a loophole in an import rule to avoid duty on platinum, making a neat 4-4.5% running into tens of crores, according to a top executive from a bullion trade lobby. Daily imports of platinum jewellery by volume have surged to as high as annual inbound shipments.
The practice, though not illegal, is “shocking” as platinum jewellery imports worth over ₹200 crore daily are escaping the import duty net, said Surendra Mehta, national secretary of India Bullion and Jewellers Association (IBJA). The central bank uses the association’s rates to redeem sovereign gold bonds.
These consignments were landing at Amritsar and Delhi airports, according to Mehta. The solution, he said, is for the commerce ministry to move platinum jewellery imports to the restricted category, as it had done for silver earlier this year.
On 24 September, the ministry moved silver jewellery from the free to the restricted category until the end of the current fiscal year (FY26), allowing only those with valid licences to import such jewellery. This was to cool the insatiable investment demand among Indians for bars and coins, which can be made by melting the jewellery.
However, while moving silver jewellery to the restricted category, the government retained platinum jewellery in the free category, which came to the notice of a few tradesmen, who decided to exploit this loophole, explained Mehta. There is nothing illegal in such imports, and traders were just exploiting an “oversight” by the authorities, he said.
Surging Imports
Merchants have been importing 300-500 kg of platinum jewellery at nil duty from Indonesia daily for the past five days under the Asean-India free-trade agreement, said Mehta. This compares with 500 kg of shipments of such jewellery each year, he said.
At the upper end, imports of platinum jewellery amount to ₹222 crore daily, based on the price of ₹44,430 per 10g, according to Mehta. The exchequer is thus forgoing ₹14 crore every day (6.4% of ₹222 crore), a large part of which is instead going into the pockets of traders. “The immediate solution is to move platinum jewellery to the restricted category.”
An importer bears the cost of melting the jewellery into bars and offers a discount to the buyer, leaving him with a 4-4.5% return, rather than the 6.4% duty avoided in the process.
Queries emailed to Ajay Bhadoo, director general of foreign trade, late on Wednesday evening didn’t receive an immediate response. Wednesday was a public holiday on account of Gurupurab.
Haven demand
The rush for precious metals like silver, gold and platinum among Indian investors mirrors the global investors’ appetite for alternate assets. It comes on the back of global economic uncertainty generated by US President Donald Trump’s tariffs and a weakening dollar, which have fuelled demand for dollar-denominated assets. Trump believes that tariffs and lower interest rates will cut the US’s massive national debt pile of $38 trillion, which has led to a weaker dollar.
The dollar index, which measures the US currency against a basket of six leading global peers including the British pound, euro and Swiss franc, has fallen 8% in the year through 4 November.
Over the same period, silver has surged 68% to ₹151,900 per kg, platinum by 79% to ₹44,430 per 10g and gold by 54% to ₹119,916 per 10g in rupee terms.
Chirah Sheth, principal consultant (South Asia) for precious metals consultancy Metals Focus, said he was not aware of the “loophole” in platinum jewellery imports.
But he termed platinum bar imports into India relative to silver imports “minuscule “. India imported 4-5 tonnes of platinum bars each year against roughly 6,000-7,000 tonnes of silver annually, he said.
