India’s September platinum imports increase multifold due to misuse of differential import duties

India's platinum imports in September jumped multifold to a record high as refiners imported a large amount of gold containing small amounts of platinum, as per a Reuters report. The importers registered the purchases with customs as a platinum alloy to avoid paying higher duties, according to government and industry officials due to a loophole in the import policy. 
In July, New Delhi raised the import duty on gold to 15% but kept the tax on platinum imports unchanged at 10.75 %. This allowed importers to explore the loophole in the system. Initially, in August, they imported a small quantity with 3% platinum and got cleared from Delhi customs as a platinum alloy. Later, they brought in more gold as platinum and soon other refiners and trade houses joined them, which lifted India's platinum imports to around 27 tonnes in September 2022 from 1.14 tonnes in September 2021. In entire 2021 India had imported 10.59 tonnes of platinum. As per the report, a Dubai-based bullion dealer told Reuters that Dubai-based gold refiners that were mixing 2% to 5% platinum into gold bars exclusively for Indian buyers.
Surendra Mehta, Secretary at the India Bullion and Jewellers Association (IBJA) suggests that the Indian government should promptly raise the import duty on platinum to 15% to stop this practice of importing gold under the guise of platinum. 
Chanda Venkatesh, managing director of CapsGold, a Hyderabad-based bullion merchant said: “India is the world's second-biggest consumer of gold and relies on imports to fulfil most of its requirements. Traders are paying a 4.25% lower duty for gold imports classified as platinum. This is giving them the advantage to offer discounts over rival suppliers." 

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished