The import will be allowed for industrial and manufacturing sectors, including electronics, electrical and specialised chemical industry, against an import authorization, thereby addressing the need of the domestic industry without disruption for actual use, the government said in a statement.
A palladium and rhodium alloy containing gold is primarily used in jewellery for white gold, as well as for dental applications.
Gold prices rose on Friday after a slightly weaker-than-expected U.S. jobs report pushed the dollar and Treasury yields lower.
Import tariffs on a range of products will be raised by 35 percentage points, Britain said, while it will also ban exports of goods such as chemicals, plastics, rubber and machinery to Russia, worth a combined 250 million pounds ($310 million).
Spot palladium was down 2.5% at $2,926.49 per ounce by 10:13 a.m. EST (1513 GMT). Prices have fallen more than $500 since scaling an all-time of $3,440.76 around 0836 GMT.
Spot gold fell 0.4% to $1,894.76 per ounce by 1305 GMT, yet was set for a fourth consecutive weekly gain. U.S. gold futures dipped 1.4% to $1,898.50.
Nornickel, the largest producer in Russia is also the world's largest producer of palladium and a major producer of platinum. It produced 2.6 million troy ounces of palladium last year or 40% of global mine production and 641,000 ounces of platinum or about 10% of total mine production
Longer term, the phasing out of combustion engines will be worse for palladium because platinum is less dependent on the auto industry and is used in hydrogen fuel cells, said StoneX analyst Rhona O'Connell.
Demand from the auto industry is rising and expected to climb further as a semiconductor chip shortage that has curtailed production eases later this year.
Precious metals joined a wider market sell-off as the coronavirus continued to spread rapidly, with some investors obliged to sell assets to cover margin calls.
The precious metal has grown by over 27 percent YTD, due to a global shortage of supply and increased demand in China.
In fact, price of the precious metal has trebled over three years, toppling even gold off the top spot in terms of monetary value.
Gold prices were little changed on Tuesday as differing views of Chinese and US officials on the interim trade deal announced last week kept investors on the sidelines.
Moneycontrol’s Shraddha Sharma talks to Corporate Bureau Chief Prince Thomas to find out why the palladium has become more expensive than platinum.
As with other commodities that are in scarce amount, in the case of palladium too, the speculators have played a role in driving the price.
Palladium, meanwhile, was set for its worst week since November 2015, after recording its biggest one-day decline in more than two years on Thursday.
Spot palladium fell 0.5 percent to $1,436.26 per ounce at 0541 GMT.
Spot palladium was up 0.7 percent at $1,594.08 an ounce at 1231 GMT, having hit a record high of $1,606 earlier in the session.
Spot palladium was up 0.3 percent at $1,588.04 an ounce, as of 0435 GMT, after marking an all-time high of $1,592.02 earlier in the session.
Spot gold inched down 0.1 percent to $1,327.51 per ounce as of 0434 GMT, while US gold futures were up 0.1 percent at $1,329.8.
Spot palladium traded as high as $1,553 per ounce as of 0400 GMT.
Palladium is crucial in the making of catalytic converters used in exhaust systems of vehicles, and an improvement in demand from the auto sector has supported the metal's surge.
Spot palladium, which traded as high as $1,491 per ounce, was up 1.5 percent at $1,479.49 at 1102 GMT.
Spot gold was little changed at $1,326.10 per ounce as of 0048 GMT, after touching a 10-month high of $1,327.64 an ounce in the previous session.
Spot gold had gained 0.3 percent to $1,324.80 per ounce by 0324 GMT, just below a 9-month peak of $1,326.30 an ounce marked on Jan. 31.