Indian banks pause gold, silver imports amid DGFT delay

Indian banks have stopped placing fresh overseas orders for gold and silver as of April 17 , after a delay in a formal government authorization needed to bring bullion into the country, trade sources said. The pause follows the expiry of the prior annual authorization on March 31, with no replacement directive yet issued for the current financial year.

Trade sources said the disruption has already left material stuck at the border: about 5 metric tons of gold and 8 metric tons of silver are being held at customs without clearance. Banks that typically handle bullion imports have held back from initiating new shipments while they wait for the updated authorization list.

The Directorate General of Foreign Trade (DGFT), which sits under India’s Ministry of Commerce and Industry, usually publishes an order at the start of each financial year naming the banks permitted to import precious metals. In this case, the previous order lapsed at the end of March, and the new list has not been released, prompting what trade sources described as an unusual interruption in the import process.

The stoppage matters because India is described by trade sources as the world’s second-largest gold consumer and the largest silver buyer, and it depends heavily on imports for both metals. With banks pausing new orders, market participants said the domestic supply chain could tighten, potentially lifting local premiums for gold and silver once near-term inventories are absorbed.

Trade sources also pointed to timing risks around Akshaya Tritiya , a major gold-buying period. They said the import pause could translate into shortages and higher premiums after the festival if the authorization delay persists and shipments do not resume in time to replenish supply.

Beyond India, trade sources said softer Indian buying could weigh on international bullion prices, given the country’s role in global demand. At the same time, a slowdown in bullion imports could reduce India’s import bill, which may help narrow the trade deficit and support the Indian rupee, described as among Asia’s weakest currencies this year.

Some analysts said the delay may reflect an effort to restrain imports to manage the trade deficit, particularly as import costs for oil, gas, and fertilizer have risen due to the Iran conflict. However, the immediate uncertainty remains the timing of the DGFT’s updated order and how quickly banks can restart ordering and clear the bullion already held at customs.

Implications

Country Impact: The pause in bullion imports could tighten domestic supply and raise local premiums for gold and silver in India, especially around Akshaya Tritiya. A reduction in imports may also help narrow India’s trade deficit and support the Indian rupee, which has been among Asia’s weakest currencies this year.

Industry Impact: Banks and bullion market participants face operational disruption while awaiting the DGFT’s updated authorization list. Importers and retailers could see supply constraints if the delay continues, with potential knock-on effects for pricing and availability after the festival period.

Market Impact: Weaker Indian demand could put downward pressure on global gold and silver prices, given India’s role as a major consumer and buyer. At the same time, reduced bullion imports may affect India’s external balances, a factor watched by currency and macro investors.