Gold imports on the anvil easier to regulate

India will soon open a new window to invite new FY24 applications to import gold from the United Arab Emirates (UAE) through the import quota system – Tariff Quotas (TRQ) as part of a trade agreement between the two countries.

DGFT Santosh Sarangi said the gold TRQs will be allocated to old and new applicants based on the revised simpler eligibility norms and lighter compliance burden for Indian importers.

This was done to allow “broad participation” in the TRQ process for all importers, rather than being limited to manufacturing importers. In addition to this, very few people bought gold from the UAE in the last financial year.

Only 8.1t of the allocated 110t of the gold TRQ was imported during the May-March period (2022-23). The UAE has since asked India to remove restrictive standards such as allocating gold to jewelry manufacturers only and allowing all importers to qualify for gold tariff quotas.

“Considering the strong trade partnership between India and the UAE and upholding the spirit of the trade agreement, the government has considered the matter and the DOR (Department of Revenue) has issued a notification dated 31st March 2023 to abolish the standard for jewelery manufacturers ,’ Sarangi told reporters.

Sarangi’s comments came against the backdrop of media reports that the Indian Bullion and Jewelers Association (IBJA) wanted the Directorate General of Foreign Trade (DGFT) to cancel the special gold import quota for the UAE trade pact allocated to 78 applicants this year and to Eligible players are asked to make new applications. Gold importers said it felt like pre-arranged gold import quotas had been fulfilled.

Under the trade agreement’s revised gold TRQ eligibility criteria, all applications will be considered, while 78 (old applications) will not need to be re-applied, government officials said. They also said concerns about favoring 78 jewelers were “unfounded”.

Under the trade agreement implemented in May 2022, the UAE immediately provided zero-duty market access for gold jewelery exports from India in exchange for a gold tariff quota, which increased from 110 metric tons in FY23; 140 metric tons in FY24, And gradually reach a maximum of 200 metric tons within five years, with only a 1% tariff reduction.