India Restricts Dubai Gold Imports Under CEPA Framework
In a significant move to regulate and streamline gold imports, India has introduced new restrictions on Dubai gold imports under the India-UAE Comprehensive Economic Partnership Agreement (CEPA). The latest directive mandates that gold and silver in unwrought, semi-manufactured, and powdered forms can now only be imported through nominated agencies, qualified jewellers, and valid tariff rate quota (TRQ) holders.
This marks a crucial development in the country’s efforts to plug loopholes in the system and ensure fair trade under the free trade agreement with the UAE.
Why Dubai Gold Import Restrictions Were Introduced
The newly implemented Dubai gold import restrictions follow the Union Budget FY26’s announcement, which aimed to introduce revised HS (Harmonised System) codes for key precious metals, including gold dore, silver dore, and platinum containing 99% or more purity. These codes are essential for classifying imports under appropriate tariff categories.
The move comes in response to a trend where some importers allegedly exploited a loophole in the CEPA by misclassifying gold products as platinum alloys. By doing so, they took advantage of lower import duties applicable to platinum under the agreement.
To prevent this misuse, the Indian government has now created a specific HS code for platinum with 99% or higher purity, limiting duty concessions to only this category. Any other form or composition of platinum, including those potentially disguised gold imports, will no longer qualify for tariff benefits.
How CEPA Impacts Gold Imports from Dubai
Under CEPA, India allows an annual import of up to 200 metric tonnes of gold from the UAE at a 1% tariff concession through a tariff rate quota (TRQ). However, to maintain the integrity of this agreement and ensure transparent trade, the government has taken this firm stance.
According to a senior government official, “This measure follows the Budget announcement to create separate HS codes to ensure that gold imports don’t happen in the name of platinum. It aligns customs procedures with regulatory objectives.”
This alignment ensures that all gold entering the Indian market is accounted for correctly and that duty exemptions are not misused under the guise of another metal.
Impact on Importers and Jewellery Industry
For importers and jewellers dealing in Dubai gold, the restrictions mean they must now adhere to stricter compliance measures. Only nominated agencies, pre-approved qualified jewellers, and those holding a valid TRQ license will be allowed to import these precious metals.
This move is expected to weed out grey practices and bring greater transparency to gold imports, while also protecting the Indian jewellery industry from unfair competition arising out of duty evasions.
However, industry experts believe that while the restrictions are a necessary step, they may lead to initial disruptions in supply chains, especially for businesses that were relying on earlier classifications.
Dubai Gold: Why It Matters to India
Dubai has long been a popular source of gold imports for India, thanks to its proximity, lower costs, and duty benefits under CEPA. Indian consumers have a strong affinity for gold, and imports from the UAE make up a significant portion of the country’s total annual gold intake.
With Dubai gold imports now falling under stricter scrutiny, both governments aim to strengthen the CEPA framework and ensure it is not misused for illegal or unintended trade flows.
Platinum Loophole and Its Closure
One of the key loopholes that prompted these Dubai gold import restrictions was the misuse of the platinum classification. Several importers reportedly labelled gold that had 99% purity as platinum alloy to get lower customs duties under CEPA. This practice, although not widespread, had financial implications for India’s customs revenue and disturbed market fairness.
The introduction of a dedicated HS code for pure platinum ensures that only genuine platinum imports receive duty relief. This not only prevents gold misclassification but also paves the way for more accurate and accountable customs data.
Future of CEPA and Precious Metal Trade
The India-UAE CEPA was signed with the vision of promoting bilateral trade, particularly in high-value sectors like jewellery. These gold import restrictions do not undermine the agreement but instead fortify it by eliminating gaps that allowed misuse.
As both countries continue to strengthen their economic ties, it is likely that similar checks and balances will be introduced in other commodity categories where there is a risk of misreporting or misclassification.
Conclusion: A Step Toward Transparent Trade
The newly imposed Dubai gold import restrictions signify India’s commitment to maintaining a fair and rule-based trading system, especially under strategic trade agreements like CEPA. By limiting gold imports to authorised agencies and tightening the HS code classifications, the government has taken a proactive step to ensure integrity, revenue protection, and policy alignment.
For traders and jewellers, this is a signal to adhere strictly to regulatory compliance, while for consumers, it could eventually mean more trusted and traceable gold in the market.
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