The two sides signed the Comprehensive Economic Partnership Agreement (CEPA) in 2022, under which a Tariff Rate Quota (TRQ) mechanism was put in place for the import of gold bullion at a concessional rate of 1% over the prevailing customs duty.
India imported gems and jewellery worth $24.08 billion from the UAE in April-February 2026 and $27.09 billion in the full FY25.
Also Read | Government tightens rules for duty-free gold imports, caps quantity at 100 kg per licence
“Actual utilisation under this TRQ has been modest, and in the most recent periods, marginal…This reflects diversification and deepening of trade across multiple sectors rather than dependence on gold imports alone,” the official said.
Under the CEPA, gold imports from the UAE enjoy preferential access. India had allowed imports of gold from Dubai at tariffs one percentage point below the normal Most-Favoured-Nation (MFN) rate through a TRQ system.
Also Read | India raises gold, silver import duty to 15% to curb imports, support rupee amid West Asia crisisThe quota began at 120 tonnes annually in 2022 and is set to rise to 200 tonnes by 2027 — nearly one-fourth of India’s yearly gold imports. With the new MFN tariff structure taking effective duties to 15%, gold imported under the UAE quota would enter at 14%.
The widening tariff gap could encourage greater routing of global bullion through Dubai, even though the UAE is not a miner of gold or silver, said a trade watcher.