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India-UAE FTA likely to help gem and jewellery industry increase exports to Gulf country

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The India-UAE Free Trade Agreement (FTA), which is likely to be signed shortly, is expected to help the gem and jewellery industry to increase exports of plain gold and gold studded jewellery to UAE. The exports of these items have been badly hit during the pandemic.

Among the top 10 gem and jewellery export destinations, UAE has witnessed the highest fall of 41.50% followed by Belgium 15.81%, Japan 12.20%, and Hong Kong 3.06% during April 2021 – January 2022 as compared to April 2019 – January 2020.

For the FTA with UAE, the Gem & Jewellery Export Promotion Council (GJEPC) has recommended to the government to seek abolition of import duty of 5% in UAE on the exports of gold, silver, and platinum jewellery from India.

Colin Shah, chairman, GJEPC, said, “UAE accounts for 80% of India’s plain gold jewellery exports and 20% of studded jewellery exports. The FTA between India and UAE has come at an opportune time when both countries are looking to rebound from the Covid-19 setback and recalibrate and realign their common business interests, including gold and diamonds. UAE is a gateway to the entire Middle East region and the proposed abolition of 5% import duty in UAE would lead to increased prosperity on both sides of the Arabian Sea.

“The FTA will provide impetus and much needed push to exports of gem and jewellery products to the Emirates as G & J exports to UAE declined significantly to US$1.18 billion in 2020-2021 due to the Covid-19 pandemic situation. With proposed nil duty , we are confident that exports of plain gold jewellery and gold studded jewellery from India to UAE would boost to US$ 10 billion (Rs 74,000 crore) in 2023,” said Shah.

UAE is also India’s one of the major export destinations for studded gold jewellery. In the last few years, exports of studded gold jewellery declined from US$1.04 billion in FY2017 to US$400 million in 2020-2021. GJEPC is hopeful that studded gold jewellery exports from India to UAE could revert to its earlier average level of US$ 800 million if the duty is withdrawn.

During the month of January, the overall gross exports of gems & jewellery stood at Rs 24426 crore showing a growth of 18.24%.

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