As restricted items, the Indian government has decided to put gold and silver while importing from South Korea. It means to import these items importers will need permission. To control the sudden surge in gold and silver imports from South Korea, this move will help.
From South Korea, gold worth more than $1 billion was imported between July 1st and August 21st and this led to the restriction on import of these precious metals. Including coins and jewelry, the restriction has been forced on all items of silver and gold.
South Korea allows the import of gold with zero basic customs duty as India has a Free Trade Agreement (FTA) with South Korea. In Goods and Service Tax (GST), 12.5% countervailing duty on gold imports has also been included. Only 3% integrated GST, therefore, included on import duty. Outside the FTA, the gold imports otherwise attract 10% customs duty.
After China, India is second in the world for gold consumption. As per an official who knew about this change in terms said that difference between the duties was a big loophole that needed to be closed. By this decision South Korea will not be impacted, said by the official as it is as per WTO norms and FTA norms have also not been violated.
There has been made categories of import called as open, restricted and prohibited by the Directorate General of Foreign Trade (DGFT). In the list of restricted items of import, currently, there are more than 400 items. Other items like animals, some seeds, uranium, explosives, and many other items are a part of this list.