India UAE commerce deal: Gold imports beneath preferential quota route stay nearly closed

India’s gold imports from the United Arab Emirates by means of the free commerce settlement haven’t seen a lot uptake following court docket circumstances across the technique of allocation of quotas by the Director Normal of Overseas Commerce. In response to 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 means of 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 increased gold and silver imports regardless of the Centre greater than doubling import responsibility on this stuff.

“Gold imports by means of the UAE commerce route have been closed,” sources aware of the event mentioned.

In response to an trade supply, importers haven’t been utilizing the tariff fee quota beneath the CEPA for imports. “Gold is being imported from the UAE however with out use of the commerce deal as a result of court docket circumstances. India can be importing gold from numerous different nations like Switzerland,” the supply defined.

The Centre had on Might 12 greater than doubled the customs responsibility on gold and silver to fifteen% from 6% as a measure to include foreign exchange reserves and the present account deficit amidst the West Asia disaster.

The Directorate Normal of Overseas Commerce additionally took measures to additional limit 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 beneath the advance authorisation scheme.

Nonetheless, issues have been raised that regardless of this transfer, gold and silver imports might proceed to rise because 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 means of 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 share level under the traditional Most-Favoured-Nation (MFN) fee by means of a Tariff Fee Quota (TRQ) system.

As per official knowledge, India’s whole gold imports stood at 795 tonne in 2023-24 and 757 tonne in 2024-25. A current PTI report had mentioned that the share of imports beneath the TRQ mechanism was solely about 5% or 40 tonne in FY24 and 18% or 140 tonne in FY25. In FY26, the allotted amount beneath the mechanism was 8.58 tonne.

Beforehand, the DGFT had additionally prolonged the validity of TRQ Authorisation for import of gold beneath India-UAE CEPA until June 30 as a result of ongoing geopolitical points.

Sources mentioned the upper import responsibility has led to a decrease import of gold within the final one month. “Measures to curb gold imports should 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. Trade sources mentioned that together with the gold responsibility hike, gross sales have been low because of lesser demand previous inventory continues to stay within the nation.