Modest Utilization of Gold Import Quota Under India-UAE Free Trade Agreement
Gold imports under India, UAE FTA quota remain modest: Official
The Economic Times
Image: The Economic Times
Gold imports from the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) have remained modest, with only 5% and 18% of total imports utilizing the concessional duty quota in 2023-24 and 2024-25, respectively. The government has increased import duties significantly to curb imports and support the rupee.
- 01Gold imports under the concessional duty quota remain low, accounting for only 5% and 18% of total imports in 2023-24 and 2024-25.
- 02The government raised import duties on gold from 6% to 15%, increasing the effective duty from 9.2% to 18.4%.
- 03India aims for a USD 100 billion non-oil trade with the UAE by 2030.
- 04Foreign direct investment (FDI) from the UAE to India saw a 75% increase post-CEPA.
- 05Total gold imports for 2023-24 were 795 tonnes, with only 40 tonnes under the TRQ mechanism.
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The utilization of the concessional duty quota for gold imports from the UAE under the India-UAE Comprehensive Economic Partnership Agreement (CEPA) has been modest. As of 2023-24, total gold imports reached 795 tonnes, with only 5% (approximately 40 tonnes) utilizing the Tariff Rate Quota (TRQ). In 2024-25, the share increased to 18% (about 140 tonnes). The government has responded to rising import levels by increasing the import duty on gold from 6% to 15%, raising the effective duty from 9.2% to 18.4%. The increase in duties aims to curb imports and stabilize the Indian rupee amid economic challenges. Additionally, India's exports to the UAE rose by 2% to USD 37.36 billion in 2025-26, while imports grew by 0.77% to USD 63.89 billion. The two countries are targeting a USD 100 billion non-oil trade by 2030. FDI from the UAE has also surged, reflecting a 75% growth since the CEPA came into effect in May 2022.
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The increase in gold import duties could lead to higher prices for consumers and impact the jewelry market in India. Homebuyers and investors in gold may face increased costs.
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