- India to open a new window for importing 140 MT of gold from UAE at concessional duty through a tariff rate quota system.
- Eligibility norms have been eased to allow more importers to use this window, with no favouritism in allocation of gold TRQ.
- The move is part of the India-UAE Comprehensive Economic Partnership Agreement and is expected to benefit both Indian importers and the UAE.
India is set to open a fresh window for the import of 140 MT of gold for FY24 at a concessional duty from the UAE through an import quota system. This system is called tariff rate quota (TRQ) in trade parlance, and it operates under a bilateral trade pact. The move comes as part of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), which allows for a concessional duty of 1% on gold imports from the UAE.
Eligibility Norms for Importers Have Been Eased
Officials have stated that there is no revenue loss on account of imports under the quota system after changes were made to the eligibility norms. These changes now allow manufacturers and jewellers to use this window. As per the revised simpler eligibility norms and lesser compliance burden for Indian importers, gold TRQ will be allocated to old and new applicants.
No Favouritism in Allocation of Gold TRQ
Director General of Foreign Trade Santosh Sarangi has said that the fresh application process is not going to materially benefit a group or section of applicants. Furthermore, easing these restrictions was already under discussion with the Department of Revenue when an exim facilitation committee met to consider applicants for availing the 140 MT of gold import quota available for this year, on March 23. 78 applications were received, and TRQ licenses have not been issued to any applicant as on date. Hence, any apprehension of favouring 78 jewellers is unfounded.
India Can Import 140 MT of Gold at 1% Duty Concession
As per CEPA, which became effective May 1, 2022, India can import 140 MT in 2023-24 from the UAE with a 1% duty concession against effective customs duty or the Most Favoured Nation rate, which is 15%. Last year, 110 MT of gold import was allowed at a concessional rate, but only 8.1 MT was imported.
UAE Requested for Removal of Restrictive Criteria
Sources have said that the UAE had requested for the removal of restrictive criteria like allocation of gold TRQ to only jewellery manufacturers and to allow all importers to be eligible for availing the quota. This move is expected to benefit the UAE as it is a major supplier of gold to India.