Delays in government clearance have prompted Indian banks to halt fresh gold and silver import orders, with shipments already stuck at customs.
Shares of Kalyan Jewellers fell nearly 6% on Friday after reports said banks in India have halted fresh gold and silver imports. Titan shares declined too because of the delay.
If delays persist, supply shortages could become visible after Akshaya Tritiya, one of India’s peak gold-buying occasions. Rising premiums during the festival season could further dampen demand.
Banks have stopped placing new orders with overseas suppliers as a formal notification from the Directorate General of Foreign Trade (DGFT) is yet to be issued. Typically, the DGFT releases an annual list of banks authorised by the Reserve Bank of India to import bullion at the start of each financial year.
The previous directive, issued in April 2025, expired on March 31. With no fresh order so far, uncertainty has forced banks to hold back new purchases.
More than 5 tonnes of gold and around 8 tonnes of silver are currently stuck at customs awaiting clearance, market participants said. Dealers noted there is little incentive to place new orders when existing consignments cannot be cleared.
Some traders believe the delay may be linked to teh government's efforts to manage the country’s import bill. With geopolitical tensions pushing up oil, gas and fertiliser prices, India’s overall import costs are expected to rise in April. Slowing bullion imports could be a temporary measure to contain the trade deficit and limit pressure on the rupee, dealers said.
India, the world’s second-largest gold consumer and the largest silver buyer, depends heavily on imports to meet domestic demand. Any prolonged disruption could tighten supply in the local market.
A slowdown in imports could have mixed implications:
It may ease pressure on the trade deficit and support the rupee
Weak domestic demand could weigh on global gold and silver prices
However, supply shortages may push up local premiums, especially ahead of peak buying seasons
Industry participants have called for clarity from the government to avoid disruptions.