India's Gold and Silver Import Surge from UAE Sparks Economic Concerns

India's gold and silver imports from the UAE have risen by 210% to $10.7 billion in 2023-24, largely due to concessional customs duties under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The surge has raised concerns about tariff arbitrage and potential revenue losses, urging calls for policy revision.

India's gold and silver imports from the UAE have skyrocketed by 210 per cent, reaching USD 10.7 billion in the fiscal year 2023-24. The surge is attributed to the concessional customs duties granted under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), signed in February 2022 and implemented in May 2022.

The Global Trade Research Initiative (GTRI) highlighted that the import of these precious metals is driven by significant tariff concessions, allowing unlimited quantities of silver with a 7 per cent tariff and 160 metric tonnes of gold with a 1 per cent concession. The rise in imports has led to calls for revising these tariff concessions to manage the arbitrage.

In addition, India's facilitation of private firms to import through the India International Bullion Exchange (IIBX) in Gift City has contributed to the increase. GTRI's founder, Ajay Srivastava, emphasized the need to lower tariffs and tighten regulations to prevent misuse, control revenue loss, and ensure fair competition.