Precious metal refiners seek duty parity to ease import disadvantage

The precious metal refining sector expects the government to address duty disparities that put domestic refiners at a disadvantage compared to imports through free trade agreements, MMTC-PAMP Managing Director and CEO Sami Guha said on Friday.

"One of the expectations we've had as not just MMTC-PAMP, but as the whole precious metal refining sector has seen this disparity, which is there in duty, especially through the SEPA route between what we get as Dore versus what refined bullion is imported at," Guha said.

The duty gap puts refiners at a significant disadvantage, though the government appears to be aware of the issue, he said.

 

FTAs signed after the Single Euro Payments Area (SEPA) have excluded bullion, and the industry hopes future trade agreements follow the same approach by not including gold and silver in lower duty structures.

To boost India's global standing in refining and increase the number of London Bullion Market Association-accredited refiners, the government needs to provide input-related benefits through duty differentials, either via the FTA route or by widening the existing differential, Guha said.

"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 and get ROIs and up their refining capacity and capability to a global level," he added.

MMTC-PAMP is ready to support the government or ministry from a technical standpoint, given its expertise in running an LBMA refinery, he added.

Currently, dore duty stands at 6 per cent for both gold and silver, with refiners getting a 0.65 per cent duty differential, making the effective rate 5.35 per cent.

MMTC-PAMP primarily imports gold in dore form as a refiner, with gold-silver imports historically in a 1:1 ratio. The company imported around 40 tonnes of gold and 50 tonnes of silver in fiscal 2024-25.

During April-December of the current fiscal year, imports totalled 36 tonnes of gold and 60 tonnes of silver, reflecting overwhelming silver demand, Guha said.