India-UAE agreement: Easier norms for gold import on the anvil

India will soon open a fresh window for inviting new applications for FY24 towards importing gold from the United Arab Emirates (UAE) through an import quota system—tariff rate quota (TRQ)—as a part of the trade agreement between both countries.

Gold TRQ will be allocated to old and new applicants as per the revised simpler eligibility norms and lesser compliance burden for Indian importers, DGFT Santosh Sarangi said.

 

This was being done to enable ‘broad-based participation’ in the TRQ process by making all imports rather than restricting it to just manufacturing importers. Apart from that, there very few takers of gold from UAE in the previous financial year.

During May-March (2022-23), out of 110 MTs TRQ of gold allocated, only 8.1 MT was imported. Thereafter, UAE had requested India to remove restrictive criteria such allocation of Gold to only jewellery manufacturers and to allow all importers to be eligible for availing Gold TRQ.

“Considering the strong trade partnership between India and UAE as well as to uphold the spirit of the Trade Agreement, the matter was considered by the government and the DOR (department of revenue) Notification dated 31.03.2023 was issued removing the Jewellery manufacturer criteria,” Sarangi told reporters.

Sarangi’s comments comes in the backdrop of a media reporting stating that Indian Bullion and Jew­ellers Association (IBJA) wants the Directorate General of For­eign Trade (DGFT) to scrap the special gold import quota from the UAE trade deal allot­ed to 78 applicants this year, and call for fresh applications from eligible players. Gold importers said that it was felt that a pre-arranged gold import quota was done.

Government officials said that as per the revised eligibility criteria for gold TRQ under the trade deal, all applications will be considered and the 78 (old applications) won’t have to reapply. They also said that the apprehension of favouring 78 jewellers is ‘unfounded’.

Under the trade deal implemented from May, 2022, UAE offered immediate zero duty market access for export of Gold Jewellery from India, in exchange for Tariff Rate Quota for Gold, which increases from 110 MTs in FY23; 140 MTs in FY24 and gradually to a maximum of 200 MT over five years, with only 1 per cent duty concession.