Incorporation of Explanation in Notification No 36 dated 18th December 2019

## Policy Analysis Report: Amendment to Foreign Trade Policy 2015-2020 Regarding Gold Imports **1. Executive Summary:** This report analyzes a notification amending the Foreign Trade Policy (FTP) 2015-2020. The amendment, issued on September 2, 2021, clarifies the definition of "Gold" for import purposes under Chapter 71 of the ITC HS, 2017, Schedule I Import Policy. It specifies that gold in any form above 22 carats falls under this definition and restricts such imports to nominated agencies notified by the Reserve Bank of India (RBI) for banks and the Directorate General of Foreign Trade (DGFT) for other entities. The key finding is that this amendment aims to provide clarity and control over the import of higher-carat gold. **2. Introduction:** This report aims to provide a detailed analysis of a specific notification amending the Foreign Trade Policy 2015-2020, based solely on the information contained within the provided policy text. The report focuses on understanding the changes introduced by the amendment concerning the import of gold. **3. Policy Overview:** * **Original Policy:** This notification amends Notification No. 36/2015-2020 dated December 18, 2019, pertaining to the Foreign Trade Policy 2015-2020. * **Core Objective(s):** Based on the text, the core objective of the *amendment* is to clarify the definition of "Gold" within the existing import regulations, specifically for classification under the ITC HS code. The policy further restricts the import of this defined gold to nominated agencies. **4. Background and Rationale:** The amendment likely arises from a need to clarify the scope of "Gold" in the context of import regulations. The original policy may have lacked a precise definition, leading to potential ambiguities in the application of import rules. This clarification ensures that gold above 22 carats falls under specific import guidelines, potentially stemming from concerns about valuation, purity, or revenue implications. **5. Key Provisions / Changes:** This notification introduces an *explanation* to the existing policy regarding gold imports. * **Specific part of the original policy being changed:** The notification adds an *explanation* to Notification No. 36/2015-2020 dated December 18, 2019. The specific element within the original notification being affected isn't explicitly stated, but it broadens the interpretation regarding what defines "gold". * **The new rule/provision:** The new rule is that "The expression Gold in any form includes gold in any form above 22 carats under Chapter 71 of ITC HS, 2017, Schedule I Import Policy. Such imports can be made only by nominated agencies as notified by RBI in case of banks and DGFT in case of others." * **Difference/Effect of the change:** This change explicitly includes gold above 22 carats within the definition of "Gold" for import regulation under the specified ITC HS code. This potentially subjects such imports to stricter scrutiny and control. Furthermore, it limits the import of gold above 22 carats to nominated agencies authorized by RBI (for banks) and DGFT (for other entities), potentially excluding other importers from directly importing such gold. **6. Target Audience and Stakeholders:** The stakeholders directly affected by this amendment include: * **Banks:** Specifically, those involved in importing gold. * **Gold Importers:** Those entities who previously imported or intended to import gold in any form above 22 carats. * **RBI (Reserve Bank of India):** As the agency responsible for notifying nominated agencies for banks. * **DGFT (Directorate General of Foreign Trade):** As the agency responsible for notifying nominated agencies for entities other than banks. * **Customs Authorities:** Who are responsible for enforcing import regulations. **7. Implementation Aspects (Inferred):** * **Responsible agency/bodies:** RBI (for banks) and DGFT (for other entities) are responsible for notifying nominated agencies. Customs authorities are implicitly responsible for enforcing the amended regulations. * **Timelines or procedures:** No specific timelines are mentioned in the text. The procedure for becoming a "nominated agency" is not detailed within the given text, but one can infer it exists. The amendment is effective from the date of notification (September 2, 2021). * **Aspects specific to the changes:** Implementation will require RBI and DGFT to establish or maintain lists of nominated agencies for gold imports. Customs officials will need to be aware of the new definition of "Gold" and the restriction on imports to nominated agencies. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is: * **Greater clarity and control over gold imports:** By defining gold as any form above 22 carats under the specified ITC HS code, the government aims to reduce ambiguity and ensure consistent application of import regulations. * **Channeling imports through authorized entities:** Restricting imports to nominated agencies allows for better monitoring and regulation of gold inflows. * **Potentially impacting the gold market:** The restrictions might affect the availability and pricing of higher-carat gold in the domestic market. **9. Conclusion:** The notification amending the Foreign Trade Policy 2015-2020 provides a clarified definition of "Gold" for import purposes, specifically encompassing gold in any form above 22 carats under Chapter 71 of the ITC HS, 2017, Schedule I Import Policy. By restricting the import of such gold to nominated agencies notified by RBI and DGFT, the amendment seeks to enhance control and oversight over the import of higher-carat gold, likely contributing to more effective regulation of the gold trade. The specific impact on the industry will depend on factors such as the number and capacity of nominated agencies and the demand for higher-carat gold.

Key Entities Referenced