India’s precious metal refining industry is seeking policy support from the government to correct duty disparities that place domestic refiners at a disadvantage compared with imports routed through free trade agreements (FTAs), according to MMTC-PAMP Managing Director and Chief Executive Officer Samit Guha.
Guha said the industry has long flagged differences in import duties, particularly under the Single Euro Payments Area (SEPA) route, where refined bullion can enter India at lower duties than dore, the semi-processed form used by domestic refiners as feedstock. “One of the expectations we’ve had, not just as MMTC-PAMP but across the precious metal refining sector, is addressing the disparity in duties—especially through the SEPA route—between dore imports and refined bullion imports,” he said.
According to Guha, this gap creates a structural disadvantage for local refiners, as they face higher input costs while competing with finished bullion imports. He added that while the issue persists, there is an increasing sense within the industry that policymakers are aware of the problem and its impact on domestic refining capacity.
FTA-related challenges
Guha pointed out that free trade agreements signed after SEPA have largely excluded bullion from preferential duty structures. The industry now hopes that future trade agreements will continue this approach and refrain from including gold and silver in reduced-duty frameworks. Such exclusions, he said, are essential to prevent further erosion of competitiveness for Indian refiners.
Call for targeted government support
To strengthen India’s position as a global refining hub and increase the number of refiners accredited by the London Bullion Market Association (LBMA), Guha said the government needs to extend input-related benefits to domestic players. This could be achieved either by widening the existing duty differential or by providing relief through the FTA framework.
“We would request the government to see what they can do in terms of either input-related benefits, in terms of duty differentials, which will really encourage local refiners to invest in the refinery, improve returns on investment, and scale up refining capacity and capability to global standards,” he said.
Guha added that MMTC-PAMP is willing to support the government and relevant ministries from a technical standpoint, drawing on its experience as an LBMA-accredited refinery. Such collaboration, he said, could help frame policies that balance trade commitments with domestic value addition.
Current duty structure
At present, the import duty on dore stands at 6 per cent for both gold and silver. Refiners receive a duty differential of 0.65 per cent, bringing the effective duty rate down to 5.35 per cent. However, industry players argue that this margin is insufficient to offset the advantages enjoyed by refined bullion imports under certain trade arrangements.
Import trends
As a refiner, MMTC-PAMP primarily imports gold in dore form. Historically, the company’s gold and silver imports have been roughly equal in volume. In fiscal 2024–25, MMTC-PAMP imported about 40 tonnes of gold and 50 tonnes of silver.
Import patterns have shifted in the current financial year, reflecting stronger demand for silver. During the April–December period, the company imported 36 tonnes of gold and 60 tonnes of silver. Guha said the higher silver volumes underline changing market dynamics and reinforce the need for a duty framework that supports domestic refining operations amid fluctuating demand.
The industry believes that addressing these duty disparities could play a critical role in boosting India’s refining ecosystem, enhancing value addition, and strengthening the country’s position in the global precious metals market.
(With PTI inputs)