The aim is to cut down on gold imports. India does that in a roundabout way, by cracking down on exports.

Bloomberg reports India Bans Gold Exports Above 22 Carats to Plug Trade Loopholes.

India has banned the export of gold products with purity above 22 carats with immediate effect, a move that the industry sees as a way of curbing irregularities in the trade.

The Directorate General of Foreign Trade issued a notice limiting shipments of jewelry, coins and medallions to 22 carats or below, without giving a reason.

"The move may be to reduce round-tripping of jewelry and coins, wherein a trader can import the gold coins or jewelry at a lower import tax because of trade agreements with some countries and re-export the same stock without any value addition," said Ketan Shroff, joint secretary of the India Bullion and Jewellers Association Ltd. The exporters would benefit from not paying the 10 percent import tax currently levied on most inbound shipments of gold, he said.