CURRENT AFFAIRS | MAY 15, 2026
The Directorate General of Foreign Trade (DGFT), under the Ministry of Commerce & Industry, issued a public notice on May 14, 2026 capping duty-free gold imports under the Advance Authorisation (AA) Scheme at 100 kg per applicant, along with tighter compliance and monitoring requirements. The move aims to plug “tariff arbitrage” — the practice of exporters importing unlimited gold duty-free under AA while domestic prices reflected the hiked 15% basic customs duty. With gold at Rs 1,66,000 per 10g (Bullion India Sarafa Association rate) and growing forex pressure, the Centre is moving to curb scheme misuse. The notification accompanies a broader trade-policy retune: a cut in the withholding tax on foreign-investor bond holdings from 20% and a ban on sugar exports earlier this year.
Constitutional & Legal Framework
- Customs Act, 1962 — principal statute for import-export duties and procedures.
- Foreign Trade (Development & Regulation) Act, 1992 — empowers DGFT to issue Foreign Trade Policy.
- Foreign Trade Policy 2023 — current FTP, in force from April 1, 2023.
- Special Economic Zones Act, 2005 — governs SEZ taxation regimes.
- GATT 1947 → WTO 1995; TRIMs covers trade-related investment measures.
- Article 246 + Union List Entry 41 — trade and commerce with foreign countries is Union subject.
Why It Matters for CLAT 2027
- Passage angle: Trade-policy tweaks, customs duties, and forex protection are CLAT GK staples.
- Distinguish AA vs EPCG vs RoDTEP: Each has a different mechanism — AA covers inputs in exports; EPCG capital goods; RoDTEP duty refund.
- WTO compatibility: India’s measures must align with GATT Art XX exceptions.
- Static GK overlap: Customs Act 1962, FTP 2023, SEZ Act 2005, PRAGATI portal.
Key Facts to Memorise
- Cap: 100 kg duty-free gold per applicant under AA scheme.
- Basic Customs Duty on gold: 15% (up from 5% earlier).
- DGFT: Headquartered in New Delhi; under M/o Commerce & Industry.
- FTP 2023: Continuous-update policy, no fixed end date.
- WTO HQ: Geneva; established Jan 1, 1995; India founding member.
- SEZ Act: 2005; rules 2006.
- Customs Act: 1962.
Mnemonic / Quick Recall
“AA = Allows duty-free inputs that Actually go into exports” — new cap = 100 kg gold. EPCG = Capital goods. RoDTEP = Refund. SEIS = Services. Customs Act 1962, FTDR Act 1992, FTP 2023.
Sources: Indian Express p.14 (15 May 2026); DGFT Public Notice (14 May 2026); PIB.
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