Skip to content Skip to Search
Skip navigation

Metals market under pressure with India-UAE pact review

People shop for jewellery in New Dehli, India; the Indian government is concerned about the impact of tariff concessions on gold and silver imports Kabir Jhangiani/ZUMA Press Wire/Alamy via Reuters Connect
People shop for jewellery in New Delhi, India. The Indian government is concerned about the impact of tariff concessions on gold and silver imports
  • Cepa compliance concerns
  • UAE exports could be affected
  • Classification and tariffs face scrutiny

The UAE’s lucrative trade in gold, silver and other precious metals is facing fresh scrutiny as India seeks a review of a Comprehensive Economic Partnership Agreement between the two countries. 

The evaluation could significantly alter the flow of these metals, impacting UAE businesses and particularly affecting exports from Russia via the Gulf state.

Sunil Barthwal, India’s commerce secretary, announced the Cepa review this week, citing concerns over compliance with the agreement’s rules of origin and the impact of tariff concessions on gold and silver imports. 

Under the Cepa, operational since May 2022, the UAE has enjoyed significant tariff concessions – 1 percent on gold and 7 percent on silver – provided a 3 percent local value addition is met. 

However, a 210 percent surge in imports from the UAE, up to $10.7 billion in the fiscal year 2023-24, has raised alarm in New Delhi which traditionally has strongly protectionist instincts.



Silver imports from the UAE have increased even more dramatically, up from $29 million in the full year to 2023 to $1.7 billion in 2024.

The Global Trade Research Initiative (GTRI), an economic think tank in India, has highlighted potential loopholes and misuse of the agreement. 

“Many imports do not meet the rules of origin conditions, hence do not qualify for concessions,” GTRI said in its report.

One identified loophole involves the classification of metals under customs rules. 

Metals with as little as 2 percent platinum content can be classified as platinum. The report said some firms have taken advantage of this by importing platinum that actually contains 98 percent gold.

This could lead to unlimited gold imports from Dubai at zero duty, resulting in significant revenue losses and a drain on India’s foreign exchange reserves, the GTRI argued.

The think tank has recommended that India reconsider its tariff cuts on platinum, silver, diamonds and gold jewellery and adjust the rules of origin to exclude profit margins from value addition calculations.

It also suggested halting imports of sanctioned metals from Russia via Dubai, which make up the majority of the trade in gold and silver.

For UAE exporters the stakes are high, says Vijay Valecha, CIO at Century Financial.

“Changes to tariff rates on silver and gold in the UAE could impact exports to India,” he says. 

“Stricter enforcement or alterations to these rules may disqualify some UAE exports from reduced tariffs, prompting UAE companies to adjust pricing strategies to stay competitive.

“This could lead to altered trade patterns, with companies exploring other markets or focusing more on local and regional sales.”

India’s decision in July to slash import duties on gold and silver from 15 percent to 6 percent complicates the situation further. 

This cut, aimed at curbing rising gold imports and smuggling, has eroded some of the competitive advantages the UAE previously enjoyed under the trade pact. 

However, with tariffs set to drop to zero in the coming years, imports could surge again unless the Cepa is renegotiated.

“The decisions made during the review will shape the future of the gold sector in both countries,” Valecha says. 

“Increased tariffs or stricter rules may raise costs, potentially affecting consumer prices or cutting into company profits.”

Stripping out oil, annual bilateral trade growth between India and the UAE has increased by just 2.5 percent in the 17 months following the Cepa. There has also been a decline in foreign direct investment into India.

Latest articles

Animal, Bird, Chicken

Almarai to foray into food segments beyond dairy

Almarai, the largest dairy producer in Saudi Arabia, will launch seafood and red meat facilities to help achieve the Vision 2030 goal of becoming food self-reliant. The company is building domestic production facilities for seafood and beef and lamb, which will become operational in two years, Bloomberg reported, citing CEO Abdullah Albader. In March, Almarai […]

OQBI has offloaded 49% of its shares, with 40% going to retail investors

Oman’s OQBI poised to make Muscat bourse debut

Oman’s OQ Base Industries will debut on Muscat’s bourse on December 15 after the state oil company subsidiary completed a $489 million initial public offering. OQBI, the third OQ unit to float since March 2023, has offloaded 49 percent of its shares. Of the shares sold, 30 percent went to institutions, 40 percent to retail […]

Turkish arms exports

Turkish arms exports up 19% year on year

Turkish defence companies have posted another record-breaking year for exports, with a 19 percent increase year on year and sales to 178 countries. Sales from January to November this year have already eclipsed 2023’s total of arms and equipment shipments to overseas clients, reflecting the arms industry’s technical developments and broader product range.  Defence and […]

Dubai Duty Free said that the sales performance was strong in November despite tough trading conditions

Perfume sales propel Dubai Duty Free to $2bn 2024 target

Dubai Duty Free (DDF) recorded sales of AED7.13 billion ($1.94 billion) in the first 11 months of 2024, as it closes in on the $2 billion annual target. The airport retailer reported sales of $205.7 million last month, marking the fifth-best month ever, propelled mainly by perfume sales, the UAE state-run Wam news agency reported. […]