India’s gold imports from the United Arab Emirates by the free commerce settlement haven’t seen a lot uptake following courtroom instances across the strategy of allocation of quotas by the Director Normal of Overseas Commerce. In line with authorities and trade sources, the CEPA door for gold imports stays nearly closed though the valuable metallic continues to be imported from the UAE by regular channels.
This comes at a time when there have been issues that the India-UAE Complete Financial Partnership Settlement (CEPA) might proceed to result in larger gold and silver imports regardless of the Centre greater than doubling import obligation on these things.
“Gold imports by the UAE commerce route have been closed,” sources conversant in the event stated.
In line with an trade supply, importers haven’t been utilizing the tariff fee quota underneath the CEPA for imports. “Gold is being imported from the UAE however with out use of the commerce deal as a result of courtroom instances. India can be importing gold from numerous different international locations like Switzerland,” the supply defined.
The Centre had on Might 12 greater than doubled the customs obligation on gold and silver to fifteen% from 6% as a measure to comprise foreign exchange reserves and the present account deficit amidst the West Asia disaster.
The Directorate Normal of Overseas Commerce additionally took measures to additional prohibit imports, together with moved silver into the restricted class of imports that means that importers now want a license for silver imports and had additionally capped duty-free gold imports at 100kg per license underneath the advance authorisation scheme.
Nevertheless, issues had been raised that regardless of this transfer, gold and silver imports might proceed to rise as a consequence of provisions of the India-UAE Complete Financial Partnership Settlement (CEPA) that give preferential entry to the valuable metallic.
This was due to the preferential entry by the India-UAE CEPA to gold and silver. Below the settlement, gold imports from the UAE get pleasure from preferential entry and India had allowed imports from Dubai at tariffs one proportion level beneath the traditional Most-Favoured-Nation (MFN) fee by a Tariff Fee Quota (TRQ) system.
As per official information, India’s complete gold imports stood at 795 tonne in 2023-24 and 757 tonne in 2024-25. A current PTI report had stated that the share of imports underneath the TRQ mechanism was solely about 5% or 40 tonne in FY24 and 18% or 140 tonne in FY25. In FY26, the allotted amount underneath the mechanism was 8.58 tonne.
Beforehand, the DGFT had additionally prolonged the validity of TRQ Authorisation for import of gold underneath India-UAE CEPA until June 30 as a result of ongoing geopolitical points.
Sources stated the upper import obligation has led to a decrease import of gold within the final one month. “Measures to curb gold imports usually are not sufficient and may by no means be sufficient in a rustic like India the place gold is bought as an funding, as a protected haven, as a blessing, for auspicious events and weddings…” they famous.
India is the world’s second-largest gold market. It imported 45.6 tonne of gold in April. Business sources stated that together with the gold obligation hike, gross sales have been low as a consequence of lesser demand outdated inventory continues to stay within the nation.
