India is seeking a review of certain clauses in the India-UAE trade agreement signed in 2022 as silver imports from the UAE continue to surge amid suspected violations of rules of origin, Commerce Secretary Sunil Bhaswal said on Wednesday.
Silver imports, mainly from the UAE, rose 439 percent to $165.74 million in July from $30.74 million in the same period last year, trade data released on Wednesday showed. The UAE is India’s third-largest trading partner, with bilateral trade expected to reach $83.65 billion in 2023-24.
“With regard to the Comprehensive Economic Partnership Agreement (CEPA), there are two issues. One is value addition norms and the other is reduction (in customs duties). So, we are in discussion with them and various issues are being discussed in the review of CEPA. So, we are seeking a review with them and once that happens, we will look into all the issues holistically,” Bhartwal said in response to a question on increase in silver imports.
“When (countries) give preferential tariff rates, it is subject to the rules of origin being met. So, when we do the review, we will look at all aspects including whether the rules of origin have been met and what further action we should take,” Bhaswal said.
Calling for an urgent review of the agreement, think tank Global Trade Research Initiative (GTRI) said the India-UAE CEPA would allow unlimited imports of gold, silver, platinum and diamonds from the UAE to India without any customs duties for the next few years.
This will result in a significant drop in annual revenue, a shift in import operations from banks to a small number of private traders and the replacement of key suppliers with Dubai-based companies, the GTRI report said.
GTRI stressed that currently, imports of gold from Dubai incur tariffs of 5 percent, but that this will fall to zero in three years’ time if the alloy contains 2 percent platinum. GTRI also argues that many of the imports do not meet the rules of origin requirements and therefore do not qualify for the preference.