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Gold Import Rules: AA/DFIA Clarifications for Banks

Current · Source: Reserve Bank of India · RBI/2013-14/367 · issued 11 Nov 2013 · ~2 min read
Quick answerRBI clarifies that Advance Authorisation (AA) and Duty Free Import Authorisation (DFIA) for gold must be used solely for exports, with no domestic diversion. For authorisations issued before August 14, 2013, the sequencing condition (imports before exports) is waived. SEZ, EoU, and trading houses can import gold only for exports.
The rule, in the simplest words
How it plays out — a real example

A forex & trade-finance officer in Mumbai reviews a client's AA permit issued in 2012. She notes that the sequencing condition (import before export) is waived, so she does not ask for proof of import order. She reminds the client that all gold under this permit must go into export jewelry, and that these exports won't help meet the 20:80 scheme's export target.

What changed

RBI issued clarifications on AA/DFIA for gold imports following representations. It explicitly stated that these authorisations are for export purposes only, with no domestic use allowed. For AA/DFIA issued before August 14, 2013, the requirement to sequence imports before exports is not enforced. Additionally, exports under AA/DFIA do not count toward the 20:80 scheme's export obligation.

What it means for you

Banks and authorised dealers must ensure that gold imported under AA/DFIA is strictly used for exports, preventing any leakage into domestic markets. The waiver of sequencing for pre-August 14, 2013 authorisations eases compliance for earlier cases. Entities in SEZs, EoUs, and trading houses can import gold only for exports, and such exports do not qualify for the 20:80 scheme, impacting how banks monitor export obligations.

What you must do

Who it affects

Scheduled commercial banks acting as Authorised Dealers, Agencies nominated for gold import, Entities in SEZs and EoUs, Premier and Star Trading Houses, Exporters using AA/DFIA for gold

❓ Common questions

Can gold imported under AA/DFIA be sold in the domestic market?

No, the circular explicitly states that gold imported under AA/DFIA must be used solely for export purposes, with no diversion for domestic use permitted.

Does the sequencing condition apply to AA/DFIA issued before August 14, 2013?

No, for authorisations issued before that date, the condition of sequencing imports prior to exports is not insisted upon.

Do exports under AA/DFIA count toward the 20:80 scheme?

No, such exports do not qualify as exports for the purpose of the 20:80 scheme.

📜 Read the original circular — full text as issued by RBI
RBI/2013-14/367 A. P. (DIR Series) Circular No.73 November 11, 2013 To All Scheduled Commercial Banks which are Authorised Dealers (ADs) in Foreign Exchange/ All Agencies nominated for import of gold Madam / Sir, Import of Gold by Nominated Banks /Agencies/Entities Attention of Authorised Persons is drawn to the Reserve Bank’s A.P. (DIR Series) Circular No. 25 dated August 14, 2013 on the captioned subject. 2. Government of India and the Reserve Bank of India have been receiving representations related to Advance Authorisation (AA) / Duty Free Import Authorisation (DFIA). Taking into account these representations and in consultation with the Government of India, it has been decided to issue the following clarifications: Any authorisation such as Advance Authorisation (AA) / Duty Free Import Authorization (DFIA) is to be utilised for import of gold meant for export purposes only and no diversion for domestic use shall be permitted.For any AA / DFIA issued prior to 14th August 2013 the condition of sequencing the imports prior to exports shall not be insisted upon. 3. Notwithstanding any of the foregoing directions, entities/units in the SEZ and EoUs, Premier and Star Trading Houses (irrespective of whether they are nominated agencies or not) are permitted to import gold exclusively for the purpose of exports only. Similarly, exports towards fulfillment of obligation under AA/DFIA scheme shall not qualify as export for the purpose of the scheme of 20:80. 4. Authorised Dealers may please bring the contents of this circular to the notice of their constituents and customers concerned. 5 The directions contained in this circular have been issued under Section 10(4) and Section 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999), and are without prejudice to permissions / approvals, if any, required under any other law. Yours faithfully, (Rudra Narayan Kar) Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/367 · issued 11 Nov 2013. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Scheduled commercial banks acting as Authorised Dealers, Agencies nominated for gold import, Entities in SEZs and EoUs, Premier and Star Trading Houses, Exporters using AA/DFIA for gold), your first concrete step on “Gold Import Rules: AA/DFIA Clarifications for Banks” is: “Verify that all gold imports under AA/DFIA are used exclusively for export purposes and not diverted domestically.” (RBI issued this 11 Nov 2013).

  1. Circular: RBI/2013-14/367 -- Gold Import Rules: AA/DFIA Clarifications for Banks
  2. Issued: 11 Nov 2013
  3. Action required: Verify that all gold imports under AA/DFIA are used exclusively for export purposes and not diverted domestically.
  4. Action required: For AA/DFIA issued before August 14, 2013, do not insist on the sequencing condition (imports before exports).
  5. Action required: Inform constituents that exports under AA/DFIA do not count toward the 20:80 scheme's export obligation.
  6. Action required: Ensure SEZ, EoU, and trading house clients import gold only for exports, as per the circular.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=8562&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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