NEW DELHI: The Indian government has notified manufacturers and traders to import up to 160 tonnes of gold from the UAE at special prices from 2024-25 under the India-UAE free trade agreement, officials said on Tuesday.
The agreement, formally called the Comprehensive Economic Partnership Agreement (CEPA), came into force on May 1, 2022. Under the agreement, India agreed to import up to 200 tonnes of gold per year from the UAE with a 1% tariff concession under the Tariff Rate Quota (TRQ). Indian officials added that India declared 140 tonnes last fiscal year and 160 tonnes for FY24-25. Think tank GTRI said in a June report that India’s gold imports from the UAE grew 147.6% from $3 billion in FY23 to $7.6 billion in FY24. The country has sought a review of the agreement. According to government data, Indian gold imports, which impact India’s current account deficit (CAD), are expected to fall 4.23% to $12.64 billion between April 2024 and July 2025 due to global economic uncertainties.
The government has reduced customs duty on gold and silver from 15% to 6% in the budget proposal. India’s gold imports are set to surge 30% to $45.54 billion in 2023-24. Switzerland is the largest source of gold imports with a share of around 40%, followed by the UAE (over 16%) and South Africa (around 10%). The precious metal accounts for over 5% of India’s total imports.