Modest Gold Import Quotas: Analyzing India-UAE Trade Agreement Impact
India's concessional duty quota for gold imports from the UAE under the CEPA has seen modest use. Despite TRQ provisions, only a small share of gold is imported through this mechanism. Import duties and taxes have increased, affecting overall trade dynamics, while bilateral trade ambitions grow.
The concessional duty quota for gold imports from the UAE, under a free trade agreement with India, has not seen significant utilization, according to an official statement. Implemented on May 1, 2022, the India-UAE CEPA included a Tariff Rate Quota (TRQ) for importing gold bullion at a reduced duty rate.
Despite the agreement, the data shows that gold imports through the TRQ mechanism were limited, comprising only 5 to 18 percent of total imports across recent fiscal years. As import duty rates increased from 6 to 15 percent alongside IGST adjustments, the actual usage of the TRQ remains marginal.
Trade between the two nations remains robust, with the UAE ranking as India's seventh-largest source of FDI. Both countries are targeting a USD 100 billion non-oil trade by 2030, despite the challenges faced in gold import dynamics under the existing agreement.
(With inputs from agencies.)
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