Rising Gold and Silver Import Duties Spark Dubai Route Surge

The drastic hike in import duty on gold and silver, from 6% to 15%, is likely to redirect the flow of imports through Dubai, according to the Global Trade Research Initiative (GTRI). The move markedly alters the economics of precious metal imports via the India-UAE Comprehensive Economic Partnership Agreement (CEPA).

Historically, India allowed gold imports from Dubai at a tariff marginally below the standard Most-Favoured-Nation rate, initially set at 120 tonnes annually in 2022 and expanding to 200 tonnes by 2027. The new regulation sees gold entering India under the UAE quota at 14% compared to the overall 15% rate, heightening appeal for imports routed through Dubai.

Similarly, India consented to a phased reduction in silver import duties from 10% to zero over a decade. As import tariffs rise to 15%, the now 8-point difference creates new arbitrage opportunities. The GTRI calls for simplified notifications, as determining applicable duties involves navigating numerous past customs amendments.

(With inputs from agencies.)